Audit revealed Non-inclusion of Transportation costs in Assessed Value for Paying Central Excise Duty: CESTAT Rejects Appeal [Read Order]
The Assistant Commissioner held that transportation and insurance charges collected by appellant in respect of door delivery of goods are includable in the assessable value of finished goods for payment of excise duty
![Audit revealed Non-inclusion of Transportation costs in Assessed Value for Paying Central Excise Duty: CESTAT Rejects Appeal [Read Order]](https://images.taxscan.in/h-upload/2026/04/22/2134127-auditjpg.webp "Audit revealed Non-inclusion of Transportation costs in Assessed Value for Paying Central Excise Duty: CESTAT Rejects Appeal [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, rejected an appeal, noting that the audit revealed that transportation costs were not included in the assessed value for payment of Central excise duty. The appellant, M/s Nishant Organics Private Limited, was issued a show cause notice on 21.08.2019 demanding Central Excise duty (including...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, rejected an appeal, noting that the audit revealed that transportation costs were not included in the assessed value for payment of Central excise duty.
The appellant, M/s Nishant Organics Private Limited, was issued a show cause notice on 21.08.2019 demanding Central Excise duty (including Education Cess and Secondary and Higher Education Cess) along with interest and penalty. The Assistant Commissioner held that transportation and insurance charges collected by appellant in respect of door delivery of goods are includable in the assessable value of finished goods for payment of excise duty.
The demand was confirmed under Section11AC(1)(e) of the Central Excise Act, 1944 read with Section 174 of the CGST Act, 2017. The Commissioner (Appeals), on 28.03.2020, rejected the appellant’s appeal and upheld the decision from the lower authority.
The counsel for the appellant pleaded that since the show cause notice was issued on 21.08.2019, it is barred by limitation as the duty is demanded for a period from January, 2015 to June, 2017. However, the CESTAT made note of the findings of the Commissioner (Appeals) who had justified the invocation of extended period for demanding duty as charges discovered during audit are not reflected in the monthly ER-1 returns.
CESTAT found that the invoices issued clearly mention that the goods were to be delivered at the customer’s door, thus the cost of transportation shall be included in the value for the purpose of charging excise duty. The two member bench of Dr. Ajaya Krishna Vishvesha (Judicial Member) and Satendra Vikram Singh (Technical Member) rejected the appeal, however, the option to pay 25% of the penalty under Section 11AC (1)(e) was extended to them within one month from the date of this order along with the duty and interest.
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