Order Date – 01 February 2023

Parties: Sri Chakra Cement Ltd Vs Commissioner of Central Tax Visakhapatnam – GST

Facts –

• The Appellant, Sri Chakra Cement Ltd, are the manufacturers of cements and clinkers.
• A show cause notice was issued alleging that appellant had paid excise duty on the value, exclusive of freight which was incurred by the appellant for delivery of goods at the premises of some of their consumers.

Issue –

• Whether the appellant is liable to pay duty on freight?

Order –

• The Tribunal held that the decision of Hon’ble Apex Court in the case of CC and CCE Nagpur Vs Ispat Industries [2015 (324) ELT 670 (SC)] squarely covers the present case in which it was held that the place of removal refers only to the place from where goods are to be sold by the manufacturer and thus it has no reference to the place of delivery which may be either the buyers premises or the premises as the buyer may direct the manufacturer to send his goods.
• It was also held that Section 4 r/w Rule 5 and Rule 7 of Central Excise Valuation Rules, the Apex Court observed that the cost of transportation from the place of removal up to the place of delivery of excisable goods is excluded from ‘Assessable value’ for the computation of excise duty.
• Hence, the value of freight charged by the appellant for delivering the cement to their buyers’ premises is not to be included while assessing the value for the purpose of payment of central excise duty. Appellant has rightly excluded the same. The differential duty confirmed by the order under challenge is therefore wrong. The appeal is allowed.