Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   CBIC issues draft rules for Customs valuation *  Top Headlines: Threshold for Benami deals, green bond investors, and more *  Govt aims 1-hour clearance for goods at all ports *  Exporters Allowed To Use RoDTEP, RoSCTL Scrips To Pay Customs Duty, Transfer Them; Rules Amended *  Millions of labourers to be affected by brick producers’ strike over hike in GST, coal rates *  Inauguration of ‘kendriya GST parisar’ *  Transporter can seek Release of Conveyance alone, not Goods under GST Act: Madras HC *  GST: Quoting of DIN Mandatory for Responding to Notice, Govt Modifies Portal *  Firms can soon file claims for GST credits of ?400 cr *  CBIC issues modalities for filing transitional credit under GST. *  Mumbai: Man creates 36 fake GST firms, arrested for input tax credit fraud of Rs 23 cr *  Report to restructure Commerce Ministry under study; idea is to set up trade promotion body: Goyal *  Firms can soon file claims for GST credits of ?400 cr *  Gambling Alert! Govt May Levy Up To 28% GST; UP, Bengal Back Move *  EPFO backs raising retirement age to ease pressure on pension funds *  India Moving Up Power Scale, Set to Become Third Largest Economy By 2030 *  Airfares Get Expensive: What Changes for Flyers From Today? *  IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. *  IBC prevails over Customs Act, says Supreme Court. *  As GST enters sixth year, a time for evaluation and reassessment *  There’s GST on daily essentials as Centre needs money to buy MLAs: Arvind Kejriwal *  Now, GST on cancellation of confirmed train tickets, hotel bookings *  GST kitty for top States could rise 20% in FY23, says Crisil *  French customs officials seize another cargo vessel over Russia sanctions *  TradeLens builds on Asia momentum with Pakistan Customs deal *  Hike tax on tobacco, reduce affordability & increase revenue: Civil society organizations to GST council *  Bihar: ?10 crore tax evasion on tobacco products detected in raids *  Centre failed on GST, COVID; would it be anti-national? Rajan on Infosys row *  Service Tax not Chargeable on Income Tax TDS portion paid by recipient: CESTAT grants relief to TVS *  Foreign portfolio investors make net investment of Rs 7575cr in Sep so far
Subject News *  Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr *   GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover *   Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court *   CBIC Issues Clarification On Extended Timelines For GST Compliance *   CBIC Issues Clarification On Extended Timelines For GST Compliance *  Budget 2023- 9.6 crore gas connections *  GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings *  GST: CBIC Extends Last Date for filing of ITC *  GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time *  Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. *  Hike in GST rates fuels inflation *  Assam: CBI arrests GST commissioner in Guwahati *  GST fraud worth ?824cr by 15 insurance Cos detected *  India proposes 15% customs duties on 22 items imported from UK *  Decriminalising certain offences under GST on cards *  Surge in GST collections more due to higher inflation: India Ratings *  MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India *   Solar projects awarded before customs duty change allowed cost pass-through *  Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty *   GST revenue in September likely at Rs 1.45 lakh crore *  Govt working on decriminalising certain offences under GST, lower compounding charge *  Building an institution like GST Council takes time, trashing is easy: Sitharaman *  GST collections in Sept may touch ?1.5 lakh crore *  KTR asks Centre to withdraw GST on handlooms *  After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims *  Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment *  Threshold for criminal offences under GST law may be raised *  Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore *  CBIC clarifies Classification of Cranes for GST, Customs Duty *  Customs seize gold hidden in bicycle in Kerala airport  

Comments

Print   |    |  Comment

PJ/CASE LAW/2014-15/2505

Is theamount recovered from customers as transportation and insurance charges in excess of what actually was incurred liable to the incidence of duty ?

Case:- M/S Indo Rama Synthetics (I) Ltd Vs Commissioner Of Central Excise, Nagpur
 
Citation:- 2015-TIOL-69-CESTAT-MUM
 
Brief facts:-the brief facts of the case are that the appellant are manufacturer of polyester yarn. The said goods were being sold at uniform price from time to time. In addition to such price, the appellant has also recovered freight, insurance and textile committee fees on the said goods. On examination, it was found that the total amount of freight recovered by them was more than the freight incurred by them. Similarly, the total amount towards insurance charges recovered by them from the customers was more than the amount paid by them as the premium to the insurance companies. Accordingly, a demand of rs. 17,66,394/was confirmed on the appellant. Out of the said amount rs. 88,534/was pertaining to the excess transportation charges collected and rs. 16,77,860/was pertaining to the excess insurance charges collected.
 
Appellant’s contention:-the learned counsel for the appellant argued that the hon'ble supreme court in the case of baroda electric meters vs. Commissioner of central excise 1997 (94) elt 13 (sc) = 2002-tiol-96-sccx has held that differential amount not includible in the assessable value since the duty of excise is on manufacture and not on profit made by the dealer on transportation. The learned counsel for the appellant also quoted number of decisions by this tribunal in support of his contention. The learned ar on the other hand argued that case is squarely covered by the decision of this tribunal in the case of tripty drinks (p) ltd. Vs. Commissioner of central excise, bhubaneswari 2002 (147) elt 586 (trikol) and the said decision of the tribunal has been upheld by the hon'ble supreme court. We have considered the rival submissions. The hon'ble supreme court in the case of baroda electric meters (supra) has observed as under:"
 
The tribunal accepted the position that equalised freight was charged by the appellant from everyone, but proceeded to say that even though freight cannot be a part of the assessable value that wherever freight actually paid was less than the amount collected by way of freight and transportation charges the difference was appropriated by the appellant and, therefore, the same would be a part of the assessable value. In our opinion, the tribunal proceeded on an incorrect premise. It was clearly held in indian oxygen ltd. V. Collector of central excise, 2002-tiol-88-sccx, that the duty of excise is a tax on the manufacturer and not a tax on the profits made by a dealer on transportation. In view of that decision, the view taken by the tribunal cannot be sustained.
 
Reasoning of judgment:-The H’ble CESTAT have gone through the judgment in the case of Tripty drinks (p) ltd., and held that the facts of the said case are entirely different. There the appellant was manufacturing aerated water. The aerated water was being supplied to the customer at the factory gate, but appellant was collecting certain amounts in the name of transportation charges, even though no transportation was being undertaken by Tripty drinks (p) ltd., and the transportation company was being run by close relations of the directors of the Tripty drinks (p) ltd. It is in those circumstances that the tribunal has taken view that the so called transportation charges are includible in the assessable value. In our view the decision of the hon'ble supreme court in the case of baroda electric meters (supra) is squarely applicable to the facts of the present case.
 
Decision:-the appeal is allowed.
 
Comment:-the crux of the case is that when excess amount is recovered from customers as transportation charges and insurance charges, which amounts to profit is not liable for duty.
 
Submitted by:- somya jain

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