In a recent case before Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) it was ruled that No Central Excise Duty is required to be paid on the freight charged separately in the sale invoices of excisable goods,
The appellant, Gulbrandsen Technologies India Pvt Ltd filed an appeal against Commissioner of C.E. & S.T.-Vadodara. The issue of the case was that whether the Central Excise duty is required to be paid on the freight charged separately in the sale invoices of excisable goods.
The appellant’s counsel Advocate Vinay Kansara, submitted that as per the terms of the sale excisable goods, the sale is on FOR basis. However, it being ex-factory sale, relying on precedence the counsel submitted that the freight shown separately in the invoice is not includable in the assessable value.
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The Court considered the submissions made by both the sides, and it was found that whether the freight is includible in the assessable value or transaction value for the purpose of section 4 of the Central Excise Act, 1994 read with Central Excise Valuation Rue, 2000, for that the sample copy of purchased order and invoice was examined.
On examination it was evident that the freight was charged separately over and above the sale price of the goods.
The bill clearly indicated that the goods were sold directly to customers without taking to depot or any other place from where the goods are sold. Hence in this ex – factory sale and the freight charges is not includible in the assessable value.
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The bench comprising Justice Ramesh Nair and Justice C.L Mahar observed that in case of factory gate sale even though sale is on FOR basis the freight charges shown or collected separately in the invoice shall not be included in the transaction value of excisable goods.
Therefore the demand on the freight charges was not sustainable. Hence the impugned order was set aside allowing the appeal with consequential relief.
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