Customs, Excise and Gold Tribunal - Delhi
Goa Paints & Allied Products vs Collector Of Central Excise on 10 December, 1987
Equivalent citations: 1988ECR699(TRI.-DELHI), 1988(34)ELT679(TRI-DEL)
JUDGMENT K.L. Rekhi, Member (T)
1. A common issue is involved in these 5 appeals, they arise out of one common order in appeal and relate to the same appellants. They were, therefore, clubbed together, heard together and hence this common order.
2. The dispute in these appeals is regarding refund claims of the appellants which were filed on the basis that excise duty already collected on the amount of freight and transit insurance included in F.O.R. destination prices should be refunded to the appellants. The lower authorities have no objection in principle to freight and transit Insurance being excluded from the assessable value. However, they have rejected the refund claims of the appellants on two grounds -
(i) the invoices issued by the appellants did not show the amount of freight and transit insurance; and
(ii) 2 of the 5 refund claims were partly time-barred.
3. The appellants do not press for that portion of their refund claims which is hit by the time bar of Section 11B of the Central Excises and Salt Act, 1944. However, in respect of the amount which is within the time limit, they invited our attention to the provisions of Section 4(2) of the Act and the judgment of the Hon'ble Supreme Court in the case of Bombay Tyres International Pvt. Ltd. [1983 ELT 1896 (S.C.)] under which deduction of the cost of transportation, whether actual or equalised, is allowable.
4. The learned Representative of the Department stated that if freight and transit insurance costs were not shown in the invoice, there may be difficulties of correlation later on. However, he stated very fairly that subject to verification of the amounts by the Assistant Collector, the claims which were within the time limit could be considered.
5. We have carefully considered the matter. We do not find any rule or provision in the Act which states that if the amount of freight and transit insurance is not shown separately before-hand in the sale invoice, they cannot be excluded from the assessable value. In a situation where a manufacturer is working on the system of actual freight, as distinct from equalised freight, it cannot always be possible to know the amount of freight and transit .insurance before-hand and to show it in the sale invoice. In many cases, the actual amounts are known only on receipt of freight bills from the railways or the transport company. There is, therefore, no justification to disallow the deduction towards freight and transit insurance merely on the ground that these amounts were not exhibited in the invoice before-hand; such an approach would render the specific provision of Section 4(2) nugatory. We do not visualise any serious difficulty in correlating the freight bills with the invoices and gate passes issued earlier, since both would be containing the material details such as the name of the customer, the destination of the goods, the description and the quantity of the goods etc.
6. We, therefore, allow all the 5 appeals with consequential relief to the appellants subject to the conditions that -
(i) the refund amount is not hit by the time bar of Section 11B; and
(ii) the claim is established on due verification of the freight bills, invoices and gate passes by the Assistant Collector.