COMMISSIONER OF CENTRAL EXCISE Vs. SUPREME PETROCHEM LTD.

JUDGEMENT

(1.) THE issue referred to this bench vide order No. M/1726 -1727/08/C -II/EB dated 18.11.08 passed by the regular Bench is whether the expenses of loading of goods within the factory for clearance to a buyer are includable in the assessable value of the goods where such expenses are incurred by, or on behalf of, the buyer.

(2.) AFTER examining the records, we find that the expenses of loading of the goods onto trucks within the respondent's factory premises and its transportation to, and unloading at, the buyers' premises were borne by the transporters who recovered such expenses from the buyers. In adjudication of two show -cause notices, which invoked the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act for demanding differential duty from the respondent, the original authority confirmed the demand of duty (with interest) against them and also imposed a penalty on them. Its decision was set aside by the first appellate authority. Hence the present appeals of the Revenue.

(3.) HEARD both sides. The ld. SDR for the appellant and the ld. Counsel for the respondent reiterated before us the respective submissions earlier made before the regular bench. The ld. SDR also referred to Section 4 of the Central Excise Act. Going by the definition of "place of removal" under Section 4(4)(b) (prior to 1.7.2000) and under Section 4(3)(c) (from 1.7.2000), the ld. SDR submitted that, in the facts of this case, the place of removal of the goods in question was the factory gate. He argued that all costs incurred up to the factory gate were to be included in the assessable value of the goods irrespective of whether such costs were incurred by the seller or the buyer. In this context, he relied heavily on the apex Court's decision in Indian Oxygen case. The SDR also claimed support from the Tribunal's decision in CCE v. Pankaj Oxygen Ltd., 2008 (232) ELT 89 (Tri -Del) and CCE v. Ultra Marine & Pigments Ltd., 2006 (204) ELT 158 (Tri -Chennai). He argued that if the principles laid down by the Supreme Court in Union of India and Ors. v. Bombay Tyre International Ltd., 1983 (14) ELT 1896 and followed in Assistant Collector v. MRF Ltd. and Ors. : 1987 (27) ELT 553 (SC) were to be applied in the present case, the expenses of loading of goods within the factory would become part of the assessable value. The ld. SDR also referred to the definition of "transaction value" given under Section 4(3)(d) with effect from 1.7.2000. He claimed that the expenses of loading of the goods within the factory for its outward transportation were incurred by the buyer on behalf of the assessee in connection with the sale of the goods and, therefore, such expenses should form part of the "transaction value" of the goods. It was argued that the loading, charges constituted "amount charged" for "outward handling" of the goods and hence fell within the coverage of the definition of "transaction value".