Order Date – 16 March 2023

Parties: Idmc Limited Vs C.C.E. & C.-Anand

Facts –

• The Appellant, Idmc Limited, delivered goods at buyer’s premises from the factory on FOR destination basis. The freight amount was charged separately in the invoice and the same does not form part of integral part of sale price. The payment terms depend on case to case basis.
• It was alleged that since the sale of goods happens at the buyer’s premises on delivery of goods and acceptance by buyers at site the place of removal for the purpose of determination of assessable value would be the buyer’s premise.

Issue –

• Whether the freight charged separately in the sale invoices of excisable goods is includible in the assessable value of such excisable goods?

Order –

• The Tribunal observed that merely because the appellant is under obligation to deliver the goods at the buyer’s premises, the place of removal which is a factory gate cannot be extended and buyer’s premises cannot be made as place of removal.
• This issue has been considered by this Tribunal in the case of Savita Oil Technologies Ltd vide order No. A/10755/2022 dated 30.06.2022, wherein reliance was placed on the Hon’ble Supreme Court judgment in the case of Ispat Industries Ltd reported at 2015 324 ELT 670 (S.C). Hon’ble Apex Court held that the buyer’s premises cannot, in law, be a “place of removal” under Section 4. 
• From the above decision the issue is no longer res integra. Therefore, the freight cannot be included in the assessable value in the facts of the present case. Consequently, no demand of duty on freight would sustain. The appeal is allowed.