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2025-VIL-474-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Assessable value, Includability of freight and insurance charges, FOR sale – Levy of additional excise duty on the freight and insurance charges separately shown in the invoices - The appellant was supplying equipment like electric transformers to various customers including State Electricity Boards under tenders where the price was quoted ex-works and freight and insurance charges were shown separately - Department held that the freight and insurance charges should be included in the assessable value for the purpose of excise duty payment - Whether the freight and insurance charges separately shown in the invoices are required to be included in the assessable value for the purpose of payment of excise duty - HELD - In the present case, the sale is on "FOR basis" as per the terms of the purchase order which clearly states "free at destination". Therefore, the place of removal would be the destination i.e. the buyer's premises and the freight and insurance charges are required to be included in the assessable value for the purpose of payment of excise duty - The Tribunal distinguished the Supreme Court judgment in Ispat Industries case, which dealt with ex-works sale, from the present case of FOR sale. The Tribunal relied on the larger bench decision in Ramco Cement Ltd. case, which held that in case of FOR sale, the buyer's premises can be considered as the place of removal, and the freight and insurance charges are required to be included in the assessable value - Merely showing the freight and insurance charges separately in the invoice does not change the nature of the sale - the orders of the adjudicating authorities are upheld and the appeal is dismissed
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