By TIOL News Service

MUMBAI, AUG 24, 2017: THIS is a Revenue appeal against the order passed by Commissioner(A), Aurangabad.

The respondent was supplier of Cement pipes for Wambhori Pipe Chari Project, Upper Pravara Canal, Sangamner Division for use thereof by the main contractor M/s Tapi Prestressed Products Ltd., Bhusaval.

It was the responsibility of the respondent manufacturer to manufacture the pipes at factory, transport them to the site, unload, shift and lower the same and lay & join the pipes at the site;that the pipes were to be handed over to the main contractor only after such activities were carried out.

The show-cause notice has brought out that the respondent had not determined the correct assessable value of the pipes cleared in the manner above. Inasmuch as when the respondent claimed deduction relating to transportation, laying, joining, testing charges from the invoice value received from the main contractor, revenue did not allow deduction thereof but alleged undervaluation of the pipes.

The Commissioner(A) set aside the order of the adjudicating authority.

In appeal, the AR submitted that the place of removal relating to the period in question in all the appeals was defined by law to be place where removal of the excisable goods was made and which is apparent from sub-section 3(c) of Section 4 of the Central Excise Act, 1944. Reliance is also placed on the judgment of the Apex Court in the case of CCE vs. Roofit Industries Ltd. - 2015-TIOL-87-SC-CX.

None was present for the respondent.

The Bench observed -

"5.1 When the notice issued by the authority below has brought clearly the facts of the contract and also place of removal where the respondent carried out certain activity over the goods cleared from the factory, there is no scope for the respondent to claim deduction since transfer of property of the goods did not pass at the factory gate but transfer thereof occurred after value addition made thereto at the site…"

Noting that the AR was right in taking support from the Apex Court judgment (supra), the CESTAT extracted paragraphs 12 and 14 of the said decision and emphasized that the Supreme Court had held that where there is clear intention of the buyer and seller to transfer property in goods to buyer at the premises of the latter and delivery of the goods has been done by virtue of section 19 of Sale of Goods Act, 1930, transfer of property of the goods shall pass only thereat under section 19 of the said Act.

And, therefore, the Revenue's appeals were allowed by setting aside the appellate order and restoring the adjudication order.

(See 2017-TIOL-3065-CESTAT-MUM)