- (1.) Whether reight and insurance charges constitute the value of the goods for the purpose of computation of Excise Duty in terms of Central Excise Act, 1944 (for short, "the Act") and the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (for short, "the Rules") is the question involved in this appeal.
(2.) Respondent is engaged in the manufacture of electric meters and parts there of falling under Chapter Sub-heading No. 9028.00 and 9033.00 of First Schedule to the Central Excise Tariff Act, 1985. Its customers, inter alia, are various State Electricity Boards constituted and incorporated under the Electricity (Supply) Act, 1948. Indisputably, the State Electricity Boards in terms of advertisements issued in this behalf called for quotation for supply of electric meters. The value of the electric meters was to be fixed as at the factory gate. Freight and the insurance charges, however, as stipulated therein, were to be charged on an average basis and not on actuals. Inter alia on the premise that the manufactured goods were actually delivered to the purchasers at their premises and not at the factory gate, a notice dated 6.2.2003 was issued to the assessee asking it to show cause as to why excise duty amounting to Rs. 9,13,260/- not paid on freight and insurance should not be demanded under Section 11A of the Act along with interest as payable under Section 11AB thereof as also as to why the penalty in terms of Rule 25 of Central Excise (No. 2) Rules, 2001/Central Excise Rules 2002 should not be imposed upon it.
(3.) Before the Adjudicating Authority, the respondent raised a plea that keeping in view the nature of transaction, freight and insurance charges were not to be included for the purpose of calculation of value of the goods. In support of the said contention, reliance was placed on Escorts JCB Ltd. v. CCE, Delhi . Distinguishing the said decision, the Adjudicating Authority by an order dated 5.11.2003 opined that there were ample reasons to believe that the sale had taken place at the buyer s end. On the said finding, the demand raised in the show cause notice as also the penalty proposed was confirmed. Respondent preferred an appeal there against before the Commissioner (Appeals), which by an order dated 26.5.2004 was allowed. Appellant preferred an appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi which has been dismissed by reason of the impugned judgment, holding: 2. The only contention of the Revenue in this case is that against the earlier order passed by the Tribunal, the appeal has been filed before Hon ble High Court. The Revenue had not produced any order passed by the Hon ble High Court staying the operation of earlier order passed by the Tribunal. In these circumstances, respectfully following the earlier order passed by the Tribunal, the appeal is dismissed.;