COMMISSIONER OF CENTRAL EXCISE Vs. MAJESTIC AUTO LTD.

JUDGEMENT

(1.) THE short point to be considered in this appeal is whether the excess amount collected as freight and insurance is to be added in the assessable value under Section 4 of the Act.

(2.) THE Asst. Collector has taken a view that since the goods have been exported under bond and no duty is leviable, the deductions under Section 4 towards equalised freight shall not be allowable. Similarly, for specially made vehicle to transport these two wheelers from Ghaziabad to Bombay port freight deductions has been allowed only one way on the ground that this vehicle is owned by the party. Deductions towards insurance has been disallowed on the ground that appellant did not submit details. The Collector (Appeals) observed in his order that the order of the adjudicating authority is illegal and improper. The party had submitted all the details in support of the claim. He observed that if the goods are exported in bond, there is no question of levying any duty, and confirming duty of Rs. 15,35,8347 - and Rs. 2,63,153/ - is without any legal authority. He also observed that deductions towards equalised freight and insurance will be permissible for academic interest to arrive at F.O.B. value even where goods are exported in bond.

(3.) BOTH the sides submit that the question involved in this case is whether department was justified in adding the excess freight and insurance charges on the ground that the amount collected by the party is more than the amount spent towards actual transport and insurance. It was brought to our notice by the respondent's Counsel that the issue involved herein has been covered by a series of decisions including Baroda Electric Meters Ltd. v CCE, Ahmedabad - 1996 (85) E.L.T. 363, Gomti Engg. Works v. CCE, Allahabad -1998 (27) RLT 849 (CEGAT) and Farm Fresh Foods (P) Ltd. v. CCE, Chandigarh -1998 (29) RLT 418. He also referred to circular issued by the Board Circular No. 203/37/96 -CX. 8, dated 26 -4 -1996 wherein clarifies this point and in this context, he drew our attention to Clause 3 of the circular. The relevant portion is as under : -