The Supreme Court has held that freight and insurance charges are not to be taken into account in determining the value of goods for imposing excise duty.
A Bench headed by Justice S B Sinha, while dismissing the Commissioner of Central Excise’s appeal, asked the (Excise) Department to pay Rs 25,000 to a manufacturer of electronic meters, Accurate Meters Ltd, towards the counsel’s fee.
“… [W]e have no doubt that the tribunal (Customs, Excise and Service Tax Appellate Tribunal) (was) correct in the view that the amount claimed by way of transportation charges and insurance cannot be considered for determining the value of the electric meters supplied,” the Bench stated.
The tribunal in its ruling had turned down the Excise Department’s plea. The apex court judgment had come on an appeal by the Central Excise Department against Accurate Meters Ltd, which had entered into contracts with various state electricity boards (SEBs) for supplying electric meters.
While the value of goods was to be fixed at the factory gate, it was decided between the parties that average freight and insurance were to be charged and not on actuals. According to the court, there were two separate contracts— one for the sale of electric meters, governed by the Sales of Goods Act, and the other governing the transportation of goods.
dear sir,
i have a suspense for service tax and vat
actually we are the contractor for DMRC project i have two quarries
1.) we give our launcher to rent which one tax applicable on that
some body says for service tax and some for vat and other says both are applicable .