M/S. Associated Strips Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:

.....and transit insurance in the price of steel tubular poles, pipes etc., manufactured by them on the ground that the buyers' premise and not the factory gate, is the place of removal and, therefore, the price at the buyers' premises will be relevant for determining the assessable value of the goods in question. it is the finding of the commissioner that the goods remain at the sellers risk until the point of destination where the goods are finally delivered to the buyer and hence ownership of the goods or title to the goods remains with seller (the applicants) until the point of destination. it is also the finding of the commissioner that the transit insurance has been taken out in the name of the applicants and hence title to the goods has not passed to the buyer until the goods are delivered at the buyers' premises.2. on hearing both sides, we are of the view the applicants have not made out a strong prima facie for total waiver, in the light of the decision of the larger bench of the tribunal in the case of prabhat zarda factory ltd. vs cce [2000 (119) elt 191] wherein the tribunal held that transfer of property took place at the buyers premises since the ownership of the.....

Judgment:

1. The applicants seek waiver of pre-deposit of Rs. 11,15,651/- confirmed as duty by inclusion of the elements of freight and transit insurance in the price of steel tubular poles, pipes etc., manufactured by them on the ground that the buyers' premise and not the factory gate, is the place of removal and, therefore, the price at the buyers' premises will be relevant for determining the assessable value of the goods in question. It is the finding of the Commissioner that the goods remain at the sellers risk until the point of destination where the goods are finally delivered to the buyer and hence ownership of the goods or title to the goods remains with seller (the applicants) until the point of destination. It is also the finding of the Commissioner that the transit insurance has been taken out in the name of the applicants and hence title to the goods has not passed to the buyer until the goods are delivered at the buyers' premises.

2. On hearing both sides, we are of the view the applicants have not made out a strong prima facie for total waiver, in the light of the decision of the Larger Bench of the Tribunal in the case of Prabhat Zarda Factory Ltd. Vs CCE [2000 (119) ELT 191] wherein the Tribunal held that transfer of property took place at the buyers premises since the ownership of the goods remained with M/s Prabhat Zarda Factory Ltd. up to the buyers' premise sand, therefore, freight and transit insurance charges are liable to be included in the assessable value of the goods. however, noting the contention of the applicants that the Sale of Goods Act itself recognises that there are exceptions to the rule that risk passes with property and the risk may sometimes remain with the seller notwithstanding the passing of property, we are of the view the deposit of Rs. 5.5 Lakhs towards duty is sufficient for the purpose of Section 35F of the Central Excise Act, 1944. We order accordingly. The amount is to be deposited within a period of eight weeks form today and on such deposit, pre-deposit of balance duty shall stand dispensed with and recovery thereof stayed pending the appeal.

Failure to comply with this direction shall result in vacation of stay and rejection of appeal without further notice.