Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   Government extends deadline for GST returns filing for taxpayers affected by cyclones *  GST on banks' 'free services' may be passed on to customers *   Govt staring at a shortfall of Rs 500 bn to Rs 1 trn in GST collection? *  Ministry seeks to bring aviation fuel under GST. *  Centre, states apportion Rs 33,000 cr IGST in November. *  GST: Government Extends Deadline For Filing TDS Returns For Oct.-Dec. To January 2019 *  Indirect Tax Evasion During April-October Stands At Rs 29,088 Crore *   Tax Collection Growing By 15-20 Per Cent Every Year: Arun Jaitley *   GST Compensation Paid To States Declines To Rs 11,900 Crore in August-September *  GST Practitioners Enrollment Exam In December *  GST can’t be Deducted from Salary of Employees sponsored by UPNL: Uttarakhand HC *  Chennai businessman held for Rs 61 crore GST evasion . *  Govt issues Advisory to UIN Entities claiming GST Refunds *  GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC *  CBIC clarifies Scope of Principal and Agent Relationship *  Tea Board of India liable to collect TCS from Tea producers and Auctioneers: CBIC *  Rs 82,775 Cr to Exporters Cleared, Rs 5,400 Cr Pending as on Oct 31 *  Kerala HC orders to take Photographs of Goods since Issue was Misclassification *  Changes in E-way Bill from 16th November 2018 *  Over 2 lakh assessees who migrated from VAT regime opt out of GST net *  GST Practitioners Enrollment Exam In December *   Bombay HC asks Petitioners seeking amendment in GST TRAN 1 to make representation before CBIC; directs CBIC to address within 12 weeks *   Congress will bring single slab GST: Rahul Gandhi *   Centre, states apportion Rs 32,000 crore IGST in October *   GST payers to be divided into four categories for targeted approach *   Centre contemplating bringing petrol, diesel under GST *    Event Management Support Services provided in Goa to a Registered Person in Maharashtra subject to Integrated GST: AAR   *   Haryana to form GST Appellate Tribunal *  Unprecedented tax reforms undertaken by Indian Customs for enhancing easy of doing business. *  Companies rush to match input tax credit with vendor returns
Subject News *   GST returns witness substantial increase in J&K: Tax dept *   Banks to impose GST on ATM usage, issue of cheque books, additional credit cards *   Realtors want different GST rates based on location of projects *  Keeping it simple: Reconciliation of GST data in 5 steps. *  India Inc seeks more time for filing GST annual returns, audit reports. *  Simplified GST return forms to be rolled out from April 1: Revenue Secretary *  CAIT urges FM Arun Jaitley to extend last date for GST filing to March 2019 . *  Air conditioners, TVs may get cheaper as GST Council likely to slash tax rate to 18% *  Key points for first ever filing of GST Annual returns. *  Government extends GST annual return filing date to March 31, 2019 *  Furnishing GST annual return extend deadline by 3 months: ICAI to CBIC *  Credit to MSEs up 5 times to Rs 1.23 lakh crore post GST: SBI study *  Need GST Council like federal institution in healthcare, farm sector: Arun Jaitley. *   How GST will cruise ahead with new-age tech ? *  GST a ‘monumental reform’: finance minister Arun Jaitley *  AB Pandey takes over as revenue secy; to focus on enhanced tax compliance via technology integration.   *  GST revenue mop up at ₹97,637 cr in Nov *   Process of getting ATF under GST bracket underway, says Jayant Sinha *   Arun Jaitley to present interim budget in February, may include tax measures *   Tax soup for restaurants not sharing service charges with staff *   Amendments to State GST Act introduced *  NAA drops Anti-profiteering charges against Fab India. *  Gur-ta-Gaddi Tercentenary Celebration is a Religious Event: CESTAT quashes Service Tax Demand for setting up Temporary Camps  *  Strange Attitude of Dept insisting Payment of Tax in Cash or DD is against the Spirit of GST: Kerala HC *  Levy of GST on Liquor License Fees. *  GST Evasion: Two more arrested in Hyderabad *  CBIC to Monitor Grievances of MSMEs on a Daily basis *  India's economic growth held back due to note ban, GST: Raghuram Rajan *  Bengaluru:Rs 1,200 Crore GST Fraud Busted *   Re-Opening of GST TRAN-1 to Rectify Errors; Bombay HC asks CBIC to resolve Issue within 12 Weeks.  

Comments

Print   |    |  Comment

PJ/Case Law/2016-2017/3448

Demand of differential duty on the amount of freight charged by the assessee for transportation of explosives to coal fields.

Case:-COMMISSIONER OF C. EX., NAGPUR-II Versus SOLAR EXPLOSIVES LTD.

Citation:-2017 (345) E.L.T. 136 (Tri. - Mumbai)

Brief facts:-The issue involved in this case was regarding the demand of differential duty from the respondent on the amount of freight charged by them for transportation of explosives to various coal fields. The contention of Revenue was that the duty liability arises on transportation charges so collected by the respondent for outward journey and return journey. Thus, the deduction on account of transportation charges collected by the respondent was not admissible to them as the freight charges. The adjudicating authority confirmed the demand raised with interest and also imposed penalty. On an appeal, the first appellate authority by impugned order had set aside the order-in-original and allowed the appeal filed by the respondent.

Appellant’s contention:-Learned DR assailed the order and submitted that the duty liability arose on the transportation of the explosives from the factory premises to the coal fields and it had been collected by issuing commercial invoices. He would rely upon the Board’s Circular No. 643/34/2002-CX., dated 1-7-2002 wherein Board had clarified that outward and inward journey was liable to be taxed. It was his submission that the respondent had supplied the explosives to the coal fields based upon the contract which was entered into after tendering for the supply of explosives. As per the terms of the contract, the explosives were to be supplied at the coal field as required hence the cost of transportation charged separately by the respondent is liable to be included in the value of the goods for discharge of Central Excise duty.

Respondent’s contention:-Learned Counsel appearing on behalf of the respondent submitted that the Hon’ble Supreme Court in the case of Commissioner of Central Excise v. Ispat Industries Ltd. - 2015 (324) E.L.T. 670 (S.C.) has held that the freight charges cannot be included in the assessable value on the ground that the sale took place at the buyer’s place. He also submitted that on factual matrix the invoices raised clearly indicate that the freight charges for which the deduction was allowed as per Rule 5 of Central Excise Valuation Rules, 2000.

Reasoning of judgment:-The Tribunal found that Revenue’s case had no merits inasmuch as the period involved in the case in hand was from July, 2000 to June, 2004. During the period, duty liability had to be discharged on the basis of transaction value and the transaction between the respondent and coal field for supply of explosives was as per the value contracted by both the parties. The contract also emphasised the transportation of explosives to the coal field which was done so by the respondent using their own specialized vehicle. They saw the specimen invoice copy produced by the learned Counsel and noted that duty paying documents were indicating separately the value for the transportation. The first appellate authority in the impugned order in unnumbered paragraph, in internal Page No. 9 of the order specifically recorded that the adjudicating authority had verified the invoices and collected the freight charges indicating on the invoices itself. If that be so, they found that the provisions of Rule 5 of Central Excise Valuation Rules, 2000, were directly applicable in the case in hand, wherein it was provided that the transport cost need not to be included in the assessable value if it was billed on the invoice and collected. It was not the case of the Revenue that the respondent had billed for more transportation charges than actually paid by them. In the absence of contrary evidence indicating that the respondent collected excess freight, they had to hold that the provisions of Rule 5 of Central Excise Valuation Rules had complied with and the excess of transportation charges need not to be included in the assessable value for discharge of additional excess duty.

Decision:-Appeal rejected.

Comment:-The gist of the case was that the assessee was engaged in manufacturing explosives and also transports the explosives to the coal fields. The Department demanded differential duty from the respondent on the amount of freight charged by them for transportation of explosives to various coal fields. The assessee contended that freight charges were incurred for transportation of goods up to buyer’s premises. Further, the freight charges were shown separately in the invoices and collected from buyer of goods, hence, not to be included in assessable value in absence of evidence of charging excess freight than shown in the invoices. It was held that the assessee was not required to pay the amount of duty in accordance with Section 4 of Central Excise Act, 1944 and Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
Prepared by:-Praniti Lalwani

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com