Customs, Excise and Gold Tribunal - Mumbai
Uni Abex Alloy Products Ltd. vs Commissioner Of Central Excise on 2 July, 2004
Equivalent citations: 2004(172)ELT467(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. 1. Appellants are manufacturers of excisable goods conferring to Customers specification. They invoice the customers as per the rates in the contracts entered and also for services rendered on account of forwarding the goods to a transporter of the customers choicest rates entered into the contracts with such customers. Whoever takes delivery at factory gate are not invoiced or charged for the said 'forwarding' charge. They employed vehicles for such forwarding services & were being billed by the vehicle owners/transporters on a monthly basis.
2. Duty demand notices were issued for having failed to include the amount of 'forwarding' charges recovered from the customers in the assemble value of the goods cleared to them. Demands were confirmed & penalties imposed. The CCE(A) dismissed the appeals as no proof the actual amount of forwarding charges or there being borne by the customers was produced before him. Hence this appeal.
3. Heard the DR & considered the material in record it is found-
a) The show cause Notice No. CEX/R-III/SCN/UNAD/ for chapter 96/73 dated Dec 96 reveals that it has an averment made therein, to the effect-
"... .. ... ... ... .in as much as they have failed to include the amount of forwarding charges recovered by them from their customers in the value for assessment... ... ... "
the finding arrived by the lower authority is-
"... ... ... ... ... ... ... In the instant case, the loading is done in the factory premises only, and the forwarding charges are not charged on a average basis.
"... ... ... ... In the number of decisions, it has been emphasized that only forwarding charges, actually 'incurred' by the manufacturer are to be excluded from the assessable value. Obviously the manufacturer must produce the substantial proof required the amount of actual forwarding charges incurred by him. In the instant case, the said assessee has not been able to produce any kind of documentary proof in support of their claim. Therefore the amount of forwarding charges mentioned in the above said SCNs, has to be included in the assessable value of the goods cleared by the said assessee. Accordingly the said assesse is liable to pay the differential Central Excise duty on the said forwarding charges incurred by them."
& by CCE(A) is--
"... ... ... ... ..I have carefully considered the facts of the case, those stated by the appellant at the time of personal hearing and the law on the subject. The appellant did not produce any proof regarding actual amount collected from the customers before the adjudicating authority. The forwarding charges are not included in assessable value as these are costs incurred and their price is ex-works price. The forwarding is aid to be normally done by customers, but in some cases it is done through local transport. They have included all the manufacturing expenses upto factory gate in the assessable value. Appellant further state that the local transport bills of forwarding is on monthly contract basis and not on job basis. However, no documents were produced to that effect at the time of personal hearing.
Since the appellant have not submitted any proof of their contention that forwarding charges are borne by customers, I find no reason to interfere with the impugned order and reject the appeal as unsubstantiated.
cannot be upheld. Whatever charges have been invoiced, as forwarding charges ex-factory gate, have been recovered. The question that actuals may be other than that recovered, would not be material since such charges ex factory up to the customers indicated destination ie in the nature of transport costs cannot be reckoned for valuation as held by Supreme Court in case of Borode-Electric Meter Ltd 1997 (94) ELT 13 Supreme Court wherein the court did not approve the theory of 'actual transports costs permissible for claiming/determining the values under Section 4. Following the same, & no nexus found to uphold the order of the lower authority when no findings are arrived, that the given costs of material/excisable goods are transferred to costs as forwarding charge. Demands of duty made are not to be upheld. The same are set aside.
b) In view of the findings that no demand duty is being determined, the penalties as imposed cannot be upheld. The penalties are set aside.
Consequently the appeal is allowed.