Customs, Excise and Gold Tribunal - Delhi
Inox Air Products Ltd. vs Cce on 23 July, 2004
Equivalent citations: 2004(116)ECR674(TRI.-DELHI)
ORDER Jyoti Balasundaram, Member (J)
1. The appellants herein are engaged in the manufacture of LPG Cylinders falling under Chapter Heading 73 of the Schedule to CETA 1985 which are being sold to oil companies in the Public Sector. Show cause notice dated 28.2.2001 was issued to them porposing recovery of differential duty as a result of including cost of transportation in the assessable value since the appellants had taken transit insurance cover, which, according to the Revenue would show that the property in the goods remained with the appellants till delivery to their customers. The notice was issued on the basis of the Tribunal's decisions in the case of Escorts JCB v. CCE New Delhi 1999 (35) RLT 9 and CCE Meerut v. Prabhat Zarda Factory . The Notice was adjudicated by the Additional Commissioner who confirmed the demand of Rs. 18,65,918/-together with interest and also imposed an amount of penalty equal to duty under the provisions of Section 11AC of the Central Excise Act read with Rule 173Q of the Central Excise Rules. The matter was carried in appeal before the Commissioner (Appeals) who upheld the adjudication order, distinguishing the Apex Court decision in the case of Escorts JCB v. CCE by which the Tribunal's order was set aside, on the ground that duty in the present case had been demanded on additional monetary consideration recovered as freight charges from their buyers through debit notes over and above the declared invoice price of the finished goods while in Escorts JCB's case no debit notice were issued. Hence this appeal before the Tribunal.
2. We have carefully considered the rival submissions. We find that the issue stands settled in favour of the assessees by Tribunal's order in the case of Associated Strips Ltd. v. CCE, New Delhi where in the Tribunal held that freight is not includible in the assessable value of the goods as the insistence of the buyer that the seller should insure the goods in transit itself, indicates that the property in the goods has passed on to the buyer for the reason that, if no title to property had been transferred to the buyer at the factory gate, the buyer could have had no interest which was required to be protected by way of insurance. The Tribunal held that the place of removal was the factory of the manufacturer. The above decision has been followed in JBM Industries v. CCE, New Delhi .
3. Following the ratio of the above, we hold that the transportation charges are not includible in the assessable value of cylinders manufactured and cleared by the appellants herein. We, therefore, set aside the impugned order and allow the appeal.
Operative part of the order aready pronounced in the open court on 23.7.2004.