Order Date – 24 July 2023

Parties: Kashyap Sweetners Limited, Jitendra Pandey Vs Commissioner of Central Excise & ST, Vapi

Facts – 

• The Appellant, Kashyap Sweetners Limited was found collecting excess amount from customers over and above the actual freight and the department was of view the same is liable to be added in the assessable value/ transaction value for the purpose of charging excise duty.

Issue – 

• Whether the excess freight amount collected from the customers is liable to be added in the assessable value/ transaction value for the purpose of charging excise duty?

Order – 

• The Tribunal observed that the issue is no longer res-integra as held by the Hon’ble Supreme Court in the case of Baroda Electric Meters that excess amount of freight from the customer is profit on account of transportation and not part and parcel of the value of the goods therefore, same cannot be included in the assessable value.
• Further this judgment was given with reference to un-amended Section 4 and Rules made thereunder prior to 01.07.2000. However, in the identical case for the period post 01.07.2000, in various judgments a view was taken that the Baroda Electric Meters (supra) prevails even after amended Section 4 and Rules made thereunder after 01.07.2000.
• Accordingly, it was held that excess freight collected by the appellant from the customers shall not be included in the transaction value for charging excise duty.

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