SHREYANS INDUSTRIES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellant are manufacturers of paper and paperboard chargeable to Central Excise duty. The point of dispute in this case is from March, 2000 to June, 2001. During this period, the appellant recovered dharmada charges @ 0.25% of the value of the goods from their customers and in addition to this, recovered transit insurance charges @ 0.2% of the value of the goods. Beside this, they recovered freight charges on the actual basis. All these charges were being recovered by issuing debit notes. The point of dispute is as to whether these charges were includible in the assessable value of the goods or not. The Department was of the view that dharmada charges, insurance charges and the freight charges being charged on the actual basis were includible in the assessable value of the goods. On this basis, two show cause notices dated 31 -7 -2001 and 5 -4 -2002 were issued to the appellant for recovery of allegedly short -paid excise duty amounting to Rs. 1,81,107/ - and Rs. 88,989/ -respectively for the period from March, 2000 to February, 2001 and from March, 2001 to June, 2001 respectively. The show cause notices were adjudicated by the Assistant Commissioner vide Order -in -Original dated 7 -11 -2003 by which he dropped the proceedings. The Revenue filed review appeals against this order of the Assistant Commissioner before the Commissioner (Appeals) and the Commissioner (Appeals) vide Order -in -Appeal dated 30th July, 2004 allowed the appeals and confirmed both the demands totalling Rs. 2,70,097/ - and beside this, also imposed penalty on them under Rule 173Q. Against this order of the Commissioner (Appeals), this appeal has been filed. Heard both the sides.

(2.) SHRI Jatin Singhal, Advocate and Ms. Surabhi Sinha, Advocate, the learned Counsels for the appellant, pleaded that transit insurance charges and freight charges were not includible in the assessable value, that in respect of the period prior to 1 -7 -2000, there was a specific provision for sub -section (2) of Section 4 providing for exclusion of the freight charges from the assessable value, that in respect of the period w.e.f. 1 -7 -2000, in accordance with the provisions of Rule 5 of the Central Excise Valuation Rules, 2000, the charges for freight and transit insurance were not includible in the assessable value when the same are separately shown in the invoices, that though in this case, the freight and transit insurance were not mentioned in the Central Excise invoices, the same had been charged separately by debit notes and this amounts to charging separately for the freight and transit insurance, that in any case since the transaction value of the goods is required to be at the time and place of removal and there is no dispute that the sale of the goods was from the factory gate, the freight and insurance charges cannot be included in the assessable value, that as regards dharmada charges, the same is not includible in the assessable value in view of judgment of the Tribunal in the case of Mohan & Co., Madras v. C.C.E., Madras reported in : 1987 (30) E.L.T. 624 (Tribunal), the civil appeal against which was dismissed by the Apex Court vide judgment reported in, 1997 (91) E.L.T. A232 (S.C.), that same view had been taken by the Tribunal in the case of Associated Soapstone Distributing Co. Pvt. Ltd. v. C.C.E., Indore reported in : 2002 (146) E.L.T. 324 (Tri. -Del.), the civil appeal against which was dismissed by the Apex Court vide judgment reported in, 2003 (154) E.L.T. A254 (S.C.), wherein the Apex Court relied upon its earlier judgment in the case of Mohan & Co., Madras v. C.C.E., Madras (supra) and that in view of this, the impugned order is not sustainable.

(3.) WE have considered the submissions from both the sides and perused the records.