Nishant Organic Pvt Ltd Vs C.C.E. & S.T (CESTAT Ahmedabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, examined an appeal concerning the inclusion of freight and insurance charges in the assessable value of goods for the purpose of levying Central Excise duty. The appellant, a manufacturer of aromatic chemicals, was subjected to audit scrutiny, which revealed that it had collected freight and insurance charges from customers for delivering goods to their premises but had excluded these charges from the assessable value while paying excise duty. At the same time, the appellant paid service tax on such transportation services and availed Cenvat credit.
Based on audit findings, a show cause notice was issued demanding duty along with interest and penalty. The adjudicating authority confirmed the demand and imposed penalty, which was upheld by the Commissioner (Appeals). The appellant challenged this decision before the Tribunal, arguing that the charges represented reimbursement for services arranged on behalf of buyers and that the transactions should be treated as ex-factory sales. It also contended that the demand was time-barred and that there was no intention to evade duty.
The Revenue argued that the invoices clearly indicated “door delivery” or “godown delivery,” demonstrating that the place of removal was the buyer’s premises. Since the appellant bore responsibility for delivery and charged freight and insurance separately, these costs formed part of the transaction value under Section 4 of the Central Excise Act, 1944.
