Case Law Details
Kashyap Sweetners Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
Introduction: In a precedent-setting decision by the CESTAT Ahmedabad, it was ruled that excess freight charges collected from customers do not have to be included in the transaction value for calculating excise duty. This article aims to explore and dissect the specifics and the implications of this ruling in the case of Kashyap Sweeteners Limited Vs Commissioner of Central Excise & ST.
Analysis: In this landmark case, the primary question posed was whether the surplus amount gathered from customers, exceeding the actual freight, should be added to the assessable value for charging excise duty. The appellant’s representative contended that the freight, in its entirety, should not be included in the transaction value from removal to delivery. Furthermore, any excess freight collected is considered profit on transportation, separate from the transaction value of the goods.
This point was further solidified by past rulings such as those in the cases of M/S Ispat Industries Limited, GP Petroleums Limited, and many others. As a part of his argument, the appellant’s representative also highlighted cases where the freight paid was higher than the freight charged from the customers, suggesting that the net difference should be considered for any potential demand.
Ultimately, the CESTAT, after careful consideration of submissions from both sides, concluded that any excess paid in freight as compared to the actual should not be included in the transaction value for calculating excise duty. This decision upholds the precedent set by the Supreme Court in the case of Baroda Electric Meters and others.
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