Full Judgment
b) CCE (Appeals), after examining the proviso of Rule 5 & 7 of the Valuation Rules 2000 found that it was clear that Transportation cost from the place of removal to the place of delivery is allowable mat too on actual basis subject to the condition that it should be shown separately in the manner along with the value (SIC) for the goods so charged and if that was not done the deduction for freight was not eligible. Thereafter, relying upon CBEC order no. 6/59/2000 - CX/ dated 19.12.2000, he did not allow such deductions as they were not shown separately and did not grant equalised freight deduction following Dhiren Chemicals 2002 (143) ELT 19 SC. Hence this appeal.
2. In the case of Kisan Mouldings Ltd and Ors 2004 (62) RLT 712, in a similar case, deduction of freight was not permitted by Revenue on the grounds that the said freight had not been separately shown in the sales invoice by placing reliance on Board's Circular No. 643/34/2002 CX dated 1.7.2002. The Bench held that freight was required to be allowed to be deducted and the orders contrary were not sustainable.
Tribunal in that case held that it was well settled that transport is a separate activity from manufacture and the cost of that activity cannot form part of the value of goods referring to [Baroda Electronic Meters Ltd v. CCE., - 1997 (22) RLT 5 SC & Indian Oxygen Ltd. v. CCE., - 1988 (36) ELT 723 (SC). Nothing contrary shown. In this view of the matter no merits are found in the denial of the deduction of average freight in the fact of this case.
3. Consequently the impugned orders are required to be set aside and appeal allowed.