Customs, Excise and Gold Tribunal - Delhi
Rajdoot Paints Ltd. vs Commissioner Of Central Excise on 2 September, 1999
Equivalent citations: 2000ECR589(TRI.-DELHI), 2000(116)ELT174(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. The appellants are engaged in the manufacture of paints. Their sales are ex-depot. Therefore, they claimed various deductions from the depot price as under :-
(a) Freight from depot to local distributor/dealer - 0.53% (b) Transit insurance from factory gate to depot - 0.16% (c) Octroi - 0.30% (d) Turnover tax - 0.19%
The Central Excise authorities disallowed the deductions in respect of the first two items. Hence, this appeal.
2. The assessment related to the period subsequent to amendment of Section 4 w.e.f. 28-9-1996 which incorporated Sub-section 4(4)(b)(iii) so as to expand the definition of "place of removal". The amendment incorporated under Sub-section 4(4)(b)(iii) reads as under :-
"a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory and, from where such goods are removed;
3. The appellants' claim for deduction was on the basis that they were incurring freight for delivery of the goods from the depot to the local distributor/dealer. The lower authorities refused the claim for deduction on the ground that the appellants have declared depot as the place of removal of excisable goods and the sale is conducted through the depots. Therefore, depot prices are to form the assessable value. The Assistant Collector further held as under :-
"There is nothing on record to show that the assessee himself under any agreement or under any terms and conditions of sale bear the responsibility to deliver the goods at buyer's destination. No depot sale price list has been submitted showing that prices are determinable at customer's/dealer's end and not at the depot. Therefore this deduction is not permissible from depot sale price under Section 4 particularly so when all the expenses of freight borne by the assessee are reflected in the balance sheet and fully accounted for while arriving at the costing of the goods. The provisions of Section 4(2) as referred to by the assessee are not applicable in this case. As per Section 4(2) element of freight is admissible for deduction if the sale price is not determinable at the place of removal and the sale is effected at any other place than the place of removal."
4. In the present appeal, the appellants have reiterated their submissions before the lower authorities. They have also filed copies of price list effective from 16-3-1997 and copies of challan cum invoice No. 1713, dated 12-10-1996 and No. 1711, dated 7-10-1996. During arguments attention has been drawn to the provision in challan cum invoice No. 1711 mentioning freight amount separately as against no mention of freight in challan cum invoice No. 1713, dated 11-10-1996 and it has been submitted that wherever no freight is mentioned, the price is inclusive of the cost of delivery at the dealer's permises. As against this, learned JDR has submitted that the finding in the impugned orders remain uneffected by the submissions made on behalf of the appellants and the documents produced, as Invoice No. 1713 does not at all mention that delivery is at the premises of the dealer at the cost of the appellant. No contract on other document evidencing that the depot price is for delivery of the goods at the premises of the dealer has also been produced.
5. With regard to cost of transit insurance, it is common ground that this insurance covers transit from the factory to the depot. The Revenue has contended that in the light of depot being the place of removal and depot price being the basis of assessment, all costs incurred up to the depot sale have to form part of assessable value and since transit insurance is up to depot, this cost also has been rightly held to be includible in the assessable value. The appellants, only submit that as transit insurance is a post manufacturing cost, the same should not be included in the assessable valued They, however, do not contest that transit insurance cost is a cost incurred before the depot sale.
6. with regard to the appellants' claim for deduction of freights the position is that the records produced do not state that the depot price includes freight from the depot to the dealer's premises. The invoices contain no entry to support such a conclusion. No other evidence in the form of agreement or contract to support such a contention has also been produced. Therefore, the finding in the impugned order that no evidence has been produced in support of the claim that the depot price includes cost of transport from the depot to dealer's premises cannot be faulted. Appellants' claim, thus, remains unestab-lished. In view of the amendment to Section 4 of the Central Excise Act with effect from 28-9-1996, which had the effect of making depot price the basis for assessment, no objection could be taken to including all costs incurred up to the depot stage. Therefore, the appellants cannot exclude transit insurance cost from assessable value.
7. For the reasons indicated above, the appeal fails and is dismissed.