Technical Associates Pvt. Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:

.....notification 120/75, dated 30-4-1975 it was not open to them to claim any deduction excepting central excise duty and local taxes if any. he has observed in his order that raising of separate invoice for freight and insurance did not absolve the appellants of their liability to pay duty with reference to such elements also. on that basis he held the appellant to be liable to pay central excise duty on the invoices raised by them including that relating to freight and transit insurance.2. shri k.k. anand, ld. counsel stated that the tribunal held in the case of collector of central excise, chandigarh v. oswal agro mills ltd. as reported in 1985 (22) e.l.t. 159 that even in a case where the goods were assessed under notification 120/75, the assessee is not liable to include the element of freight and insurance in the assessable value. this decision was followed by the tribunal subsequently in the case of somaiya organics (india) ltd. v. collector of central excise, allahabad - 1997 (21) rlt 357. in view of the settled position, he pleaded that appeal should be allowed.4. we have considered the submissions and have perused the record. the finding in the impugned order is hard to.....

Judgment:

1. This appeal is directed against the Order-in-Original dated 25-8-1989 passed by the Addl. Collector of Central Excise, Allahabad confirming the demand of duty of Rs. 11,311.92 on the ground that having opted for the facility of assessment under Notification 120/75, dated 30-4-1975 it was not open to them to claim any deduction excepting Central Excise Duty and local taxes if any. He has observed in his order that raising of separate invoice for freight and insurance did not absolve the appellants of their liability to pay duty with reference to such elements also. On that basis he held the appellant to be liable to pay Central Excise Duty on the invoices raised by them including that relating to freight and transit insurance.

2. Shri K.K. Anand, ld. Counsel stated that the Tribunal held in the case of Collector of Central Excise, Chandigarh v. Oswal Agro Mills Ltd. as reported in 1985 (22) E.L.T. 159 that even in a case where the goods were assessed under Notification 120/75, the assessee is not liable to include the element of freight and insurance in the assessable value. This decision was followed by the Tribunal subsequently in the case of Somaiya Organics (India) Ltd. v. Collector of Central Excise, Allahabad - 1997 (21) RLT 357. In view of the settled position, he pleaded that appeal should be allowed.

4. We have considered the submissions and have perused the record. The finding in the impugned order is hard to follow. The assessee who opted to avail of the exemption under Notification 120/75 cannot be saddled with higher duty calculated with reference to assessable value. It has to be appreciated that Notification 120/75 is an exemption notification and gives partial relief from duty and this cannot be applied in a way to determine the assessable value beyond what it could be under Section 4. Under this provision, items like freight and insurance are clearly outside the purview of the assessable value. They cannot be covered or included in the assessable value on the ground that the appellant had opted for invoice value under Notification 120/75. The impugned order is set aside and appeal is allowed.