Full Judgment
S.S. Kang
Heard both sides.
2. The Revenue filed this appeal against the impugned order passed by the Commissioner (Appeals).
3. The brief facts of the case are that the respondents are engaged in the manufacture of oxalic acid and at the request of certain customers, the goods manufactured were delivered at a railway station at Kolhapur for further transportation by rail and the respondents are recovering the transportation charges from the factory gate to the railway station separately by issuing debit notes to their customers. The Revenue wants to add the transportation charges to the assessable value of the goods.
4. The Commissioner (Appeals) in the impugned order held as under:-
“4. I have carefully gone through the records of the case and submissions made by the appellants. The issue to be decided in the present case is whether the transportation charges recovered separately under debit notes and not reflected in the invoices are required to be added in the assessable value. It is seen that the adjudicating authority has confirmed the demand for contravention of Rule 5 of Central Excise Valuation Rules 2000. I find that provisions of Rule 5 are applicable if goods are sold for delivery at a place other than place of removal. Only in such circumstances the value of such goods shall be deemed to be transaction value excluding actual cost of transportation from place of removal to place of delivery provided the cost of transportation is charged to the buyer in addition to the price of goods and shown separately in the invoices. However, I find that in the present case the excisable goods were sold for prices which were FOR Jaisingpur/Kolhapur i.e. for delivery at Jaisingpur/Kolhapur and not for a place other than place of removal and therefore, provisions of Rule 5 of Central Excise Valuation (DEPG) Rules 2000 do not come into play. Further appellants have contended that the charges recovered by way of debit notes were actual transportation charges and the adjudicating authority has not disputed the same. Therefore the Order-in-Original is not sustainable.
5. In view of the above discussion, Order-in-Original is set aside and appeal is allowed.”
5. The case of the Revenue is that as per the purchase order, the respondents were required to deliver the goods at the destination mentioned therein and the respondents delivered the goods at the destination as mentioned in the purchase order and subsequently recovered the transportation charges by issue of debit notes.
6. From the record we find that as the appellants were clearing the goods at factory gate. However, in some cases where the customers are at Mumbai, Hyderabad, Nagpur etc., the goods were transported at the request of the buyer at the railway station at Kolhapur for further transportation and such charges are separately recovered from the customers. In these circumstances, we find no infirmity in the impugned order passed by the Commissioner (Appeals). The appeal is dismissed.