Whether transportation charges includible in the assessable value on the basis that charges were collected over and above the actuals?

PJ/Case Law/2013-14/2001

Case:- GELDHOF PVT. LTD. Vs COMMISSIONER OF CENTRAL EXCISE, BELAPUR

Citation:- 2013 (296) E.L.T. 113 (Tri. - Mumbai)

Brief facts:- The appellant had filed this appeal along with stay application against the impugned order. The facts of case were that the appellants had cleared the goods from their factory and as the appellants were having their own vehicles for transportation of goods, they used their vehicles for transporting the goods and charged transportation charges, which had been shown in the invoices separately. The transportation charges shown in the invoice were more than the actual expenses incurred by the appellant for transportation charges & thus it was contended that the transportation charges were includible in the assessable value. Therefore, the demand of Rs. 2,92,492/- was confirmed along with interest and equivalent amount of penalty.

Appellant’s contentions:- The appellant contended that the transportation charges separately collected were not includible in the assessable value and so the impugned order confirming the demand along with interest and penalty is not at all sustainable.

Respondent’s contentions:- The Department was of the view that the transportation charges shown in the invoice were more than the actual expenses incurred by the appellant for transportation charges, therefore, the amounts, which they had referred excess over and above the expenses incurred by them in transportation charges was includible in the assessable value.

Reasons of facts:- The Bench found that as per Rule 5 of the Central Excise (Valuation) Rules, 2000, the transportation charges were shown separately in the invoice or charged separately were not includible in the assessable value. In this case, a show-cause notice had been issued for the transportation charges, which were charged separately by the appellants in the invoice and the expenses incurred by them on transportation, which was not the correct view of the department to allege in the show-cause notice. In fact while calculating the expenses incurred by the appellant on transportation charges, the maintenance of vehicles was also not considered. As the transportation charges separately were not includible in the transaction value, therefore, they did not find any merit in the impugned order.
In view of the above findings, the impugned order was set aside and appeal was allowed with consequential relief.

Decision:- Appeal allowed.

Comment:- The analogy drawn from the case is that that as per Rule 5 of the Central Excise (Valuation) Rules, 2000, the transportation charges that are shown separately in the invoice or charged separately are not includible in the assessable value irrespective of the fact that such transportation charges have been collected in excess of the actual transportation charges incurred.

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PJ/Case Law/2013-14/2001

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