1. Consequent to CESTAT, Bangalore's Final Order No. 1417/2004 dated 23.8.2004, the Commissioner has passed the de novo order No. 16/2005 dated 27.6.2005.
2. The issue relates to the inclusion of transportation charges in the assessable value of the Cylinders manufactured and cleared by the appellants. The matter was remanded for de novo consideration to consider as to whether the issue falls within the ambit of Section 4(1)(a) as contended by the appellant or under Section 4(1)(b) as contended by the Revenue. In the impugned order, the Commissioner holds that the case falls within the ambit of Section 4(1)(b) of the CE Act, 1944. The appellants strongly challenge the findings of the adjudicating authority. Hence, they have come before this tribunal for relief.
3. Shri C. Sarabheswara Rao, the learned Consultant appeared for the appellants and Shri K.S. Bhatt, the learned SDR for the Revenue.
(i) There can be no clearance document of greater authenticity than the relevant Invoice, lorry receipt, etc. to establish beyond any doubt that the goods were removed direct from the factory and were consigned direct to the factory nominated by the consigner.
(ii) The relevant documents were shown to the adjudicating authority.
(iii) The Apex Court, in Escorts JCB Ltd. , clearly states that delivery of the goods to the lorry driver denotes transfer of the goods to the consignee. The lorry receipt and consignment note are available. These documents, in the light of the Apex Court's decision, established beyond the ray of doubt that the place of removal is the factory gate and, therefore, this is squarely a case falling within Section 4(1)(a) and not under Section 4(1)(b).
(iv) The findings of the lower authority that this is a case falling under Section 4(1)(b) basing on an inconsequential stipulation in the Purchase order of the consignee is, therefore, totally incorrect.
(v) Even the Purchase Order itself says that the date of invoice itself is the date of delivery.
(vi) Moreover, there is no allegation in the Show Cause Notice that the place of delivery is the consignee's nominee and not the factory gate of the appellant. It has been clearly stated in the statement of the Appellant's Manager even at the Investigation stage that the transportation of the Cylinders to various destinations was arranged as required by the consignees vide paras 4 & 7 of the Show Cause Notice. Therefore this is not a case of sale of goods for delivery at the destination. The transport is arranged at the instance of the consignee on his account as a matter of routine commercial courtesy.
(vii) Furthermore, a stipulation regarding the transfer of ownership of the goods from the consignor to the consignee as mentioned in the Purchase order or Para 5.8 of the agreement of M/s. IOC, who is but one of the three such consignees does not exist in the agreements of the other two consignees viz. HPCL and BPL. Under the circumstances, the action of the lower authority in depending solely on one minor stipulation of one company in deciding whether this is a case of Section 4(1)(a) or 4(1)(b) is totally incorrect. In fact, this stipulation is only to enable any action if necessary to be taken by the consignor locally.
6. We have gone through the records of the case carefully. The Commissioner, after going through certain provisions of the Purchase order given by M/s. IOC to the appellant, comes to the conclusion that the case falls under Section 4(1)(b) of the Central Excise Act, 1944.
This approach, we are afraid, is not correct. As rightly contended by the learned Consultant, the invoices indicate the basic price of the Gas Cylinders. Even the purchase order also indicates the basic price of the Gas Cylinder. This is obviously Section 4(1)(a) price. The appellants undertake the responsibility of transport for the convenience of the buyers who are Public Sector Undertakings. For the simple reason that the appellants have undertaken the responsibility of transportation, the Commissioner comes to the conclusion that there is No. 4(1)(a) price. In any case, the Excise is a duty on the manufacturer. The manufactured product Cylinder is ready for delivery at the factory gate. It is either transported by lorry or by rail. The freight is separately paid by the buyers even though the appellant undertakes the responsibility of transportation and delivery at the buyers' premises. There is very clear indication that 4(1)(a) price is available. In these circumstances, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)