By TIOL News Service

MUMBAI, JAN 30, 2017: THE issue involved is whether the freight insurance collected by the appellant separately over and above the invoice value by raising the commercial invoice is includible in the assessable value of the excisable goods.

The lower authority held that since the transportation charges have not been shown separately in the invoice, therefore, the same is not excludible from the assessable value in view of Rule 5 of the Valuation Rules, 2000.

The appellant is before the CESTAT and submits that although the transportation was not shown separately in the excise invoice but the actual freight paid by the appellant was shown in the commercial invoice. Reliance is placed on the decisions in Emerson Network Power (I) Ltd - 2015-TIOL-303-CESTAT-MUM, Ispat Industries Ltd - 2015-TIOL-40-SC-CX, Petals Engineers Pvt. Ltd - 2016-TIOL-643-CESTAT-MUM, Kirloskar Oil Engines Ltd - 2012-TIOL-1057-CESTAT-MUM.

The AR reiterated the findings of the impugned order.

The Bench observed -

+ The demand of duty on the transportation charges was confirmed by the lower authorities only on the ground that the same was not shown separately in the invoice issued under Rule 11 of Central Excise Rules, 2001.

+ The purpose of showing freight separately in the invoice is only to show the actual amount of freight. However freight per se is not includible in the assessable value. Therefore, whether the freight amount shown separately in the invoice issued under Rule 11 of the Central Excise Rules, 2001 or raised by separate invoice in respect of transportation, it is one and the same because in both the case the amount is identifiable as transportation.

+ Merely because the transportation charges are not mentioned in the excise invoice, the same cannot be charged to excise duty.

The appeal was allowed.

(See 2017-TIOL-258-CESTAT-MUM)