Order Date – 22 December 2022

Facts –

• The Appellant, M/s. Gujarat Polysol Chemicals Pvt Ltd is engaged in the manufacture of chemicals and they were supplying their finished goods on payment of central excise duty at the doorsteps of the buyers. The appellants were recovering freight charges on actual basis from buyers.
• A demand for excise duty was made on freight charges collected by the appellant while supplying goods to customers on FOR basis.

Issue –

• Whether the demand of excise duty on the freight charges collected by the appellant is in order?

Order –

• The Tribunal held that Rule 5 requires that where goods are delivered at a place other than place of removal then the cost of transportation from the place of removal up to the place of delivery of the excisable goods needs to be excluded from the assessable value.
• It was also held that the cost of transportation if collected in addition to the price of the goods and shown separately in the invoice, needs to be excluded from the assessable value. Since the original documents are not available the matter is remanded back to the original adjudicating authority.
• Appeal is allowed by way of remand.