2026-VIL-622-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Inclusion of freight and insurance charges in assessable value for excise duty – Appellant was charged excise duty on the value of finished goods inclusive of freight and insurance charges collected from customers for door delivery of goods. The appellant argued that the freight and insurance charges were merely reimbursements and should not be included in the assessable value - Whether the freight and insurance charges collected by the appellant from its customers for door delivery of goods should be included in the assessable value for the purpose of levying excise duty – HELD - The invoices issued by the appellant clearly mentioned "door delivery" or "godown delivery", indicating that the place of delivery of goods was the buyer's premises and not the factory gate - when the sale of goods takes place at the buyer's premises and not at the factory gate, the costs incurred up to the point of transfer of ownership, including freight and insurance, should be included in the assessable value. There is no merit in appellant's argument that the freight and insurance charges were merely reimbursements, as there was no evidence of any separate agreement or contract with the buyers to that effect - The invocation of extended period of limitation and the imposition of penalty under Section 11AC of the CEA, 1944 is upheld, as the non-inclusion of freight and insurance charges in the assessable value was discovered during the audit of the appellant's records – The impugned order is sustained and the appeal is dismissed
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