The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) of Chennai Bench has ruled against M/s.Royal Enfield (Unit of M/s.Eicher Motors Ltd.) held that packing charges have to be included in the assessable value.
Shri R. Rajaraman appeared on behalf of the appellant and Shri Raghavan Ramabadran appeared on behalf of the Respondent.
The Department challenged the order of the Commissioner (Appeals) who had modified the order passed by the original authority by reducing the duty liability and holding that the respondent is eligible for a refund.
Section 4 of Central Excise Act, 1944 was amended on 28.09.1996 whereby ‘depot’ was also included in the definition of ‘place of removal’. The Commissioner (Appeals) has analysed this issue and held that the period of the dispute falls before 28.09.1996 and after 28.09.1996.
The packing was done within the factory of the respondent, since the appellant incurred the packing expenses within the factory it has to be included in the assessable value even for the period before the amendment of the definition of ‘place of removal’.
It was observed that the demand on packing charges for the period from 30.12.1983 to 31.03.1997 has been set aside since as per Order No.9/1997, the demand was dropped by the adjudicating authority and the department had not taken up the matter in appeal. The respondent has argued that the packing of motorcycles is undertaken only for long-distance transportation and that the nature of packing is secondary packing.
A Coram comprising of Mrs Sulekha Beevi C.S, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) observed that the demand for the period 01.05.1996 to 31.03.1997 cannot sustain. The Tribunal upheld that the order passed by the Commissioner (Appeals) and held that the period for which the duty demand has to be set aside would be from 01.05.1996 to 31.03.1997 only. Further held that respondents are liable to pay duty on packing charges for the balance period.
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