2025-VIL-1693-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Assessable value, Place of removal, Freight charges - Appellant is manufacturer of cement and was selling cement packed in bags of 50 kg to dealers/distributors as well as industrial/institutional customers - Department held that the appellant was paying excise duty on the value exclusive of freight, which was incurred for delivery of goods at the premises of the customers on a FOR destination basis – Demand of duty on the cost of transportation from the factory gate to the buyer's premises - Whether the freight charges collected by the appellant from the customers were liable to be included in the assessable value for payment of Duty - HELD - The admitted position is that the sales were on FOR destination basis and not ex-works. While the appellant relied on the judgment of the Supreme Court in Ispat Industries Ltd case to contend that the place of removal would always be the factory gate or the depot, the Department relied on the judgments in Roofit Industries Ltd and Emco Ltd cases to contend that the place of removal should be determined based on the facts of the case - The issue of determining the place of removal in case of FOR contract basis sales was extensively dealt with by the Larger Bench in the appellant's own case, wherein it was held that the authority needs to ascertain the place of removal by applying the relevant judgments and the Board Circular. When the sale is on FOR basis, the judgment in Roofit Industries Ltd and Emco Ltd cases would be more appropriately applicable - In the admitted factual matrix where the sale has taken place at the premises of the industrial/institutional customers, the freight element is not excludable from the assessable value/transaction value for the purpose of determination of duty - The appeals are allowed partly by way of remand to the adjudicating authority to recompute the duty liability by considering (i) any sale under RSP/MRP where the element of freight would not be applicable, and (ii) the actual transportation charges collected by the appellant from its customers - the appeals are allowed partly by way of remand
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