Order date – 10th April 2023

Parties – Messrs Mira Industries Vs C.C.E.-Ahmedabad-ii

Facts –

• The appellant, MESSRS MIRA INDUSTRIES, is engaged in the manufacturing of Power Driven Pumps (PD Pumps) and parts thereof falling under chapter 84 and 85 of Central Excise Tariff Act.
• The appellant had collected freight and handling charges from their customers @ 0.5% on assessable value. However, the appellant had not included the said charges in the assessable value of excisable goods.

Issue –

• Whether the freight and handling charges collected by the appellant from their customers should be included in the assessable value of excisable goods cleared on payment of duty?

Order –

• The Tribunal observed that the Revenue's contention lacks merit, as the appellant has discharged duty liability based on the transaction value during the disputed period. The duty-paying documents have separately indicated the value for the freight and handling charges.
• The department has not provided any evidence to demonstrate that these charges are a means of reducing the assessable value of goods. In the absence of any such evidence, it must be concluded that the entire element of freight and handling charges shown separately in the invoices is nothing else but freight and handling charges.
• The CESTAT, West Zonal Bench, Mumbai, in the case of CCE, Nagpur v. Ram Krishna Electrical Pvt. Ltd.2011 (272) E.L.T. 149 (Tribunal) held that the amount charged as freight and handling charges, and separately shown in the invoices, cannot be included in the assessable value u/s 4 of the Central Excise Act, 1944.
• Therefore, the freight and handling charges indicated separately in the appellant's invoice are not includable in the assessable value of the excisable goods, and the duty demand on these elements is not sustainable.
• Thus, the impugned order is set aside, and the appeal filed by the appellant is allowed.