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2002 Supreme(SC) 1118
IN THE SUPREME COURT OF INDIA
B. N. Agrawal, S. N. Variava, JJ.
PRABHAT ZARDA FACTORY LIMITED
Versus
COMMISSIONER OF CENTRAL EXCISE AND ANOTHER.
Civil Appeal Nos. 4808 and 4809 of 2000 with Civil Appeal Nos. 1858, 1859, 7898 of 2001 and 4221 of 2002
Decided On: Decided On : 14-11-2002
Freight and insurance charges for delivery of goods from a depot to customers are not includible in the assessable value for excise purposes, although charges incurred to transport goods to the depot remain includible.
Headnote:(A) Central Excise - Assessable value - Inclusion of freight and insurance charges - Charges for delivery from the depot to the customers are not includible in the assessable value for the purposes of excise - Charges incurred up to the depot, however, are includible.
Facts of the case:
The dispute pertained to whether freight and insurance charges incurred for delivering goods from a depot to customers should be included in the assessable value for the purposes of excise duty, given that the sales were conducted from the depot.
Findings of Court:
The court clarified that while freight and insurance charges up to the depot are includible in the assessable value for excise, charges for delivery from the depot to the customers are not includible.
Issues: Whether freight and insurance charges for delivery from a depot to customers are to be included in the assessable value for the purposes of excise.
Ratio Decidendi: The court held that where the sale is from a depot, the freight and insurance for delivery to the customers from that depot are not includible in the assessable value for excise purposes.
Result: Appeals allowed.
Legal Category Hierarchy
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taxation
-
central excise
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valuation
- freight and insurance charges
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valuation
-
central excise
ORDER
In these matters, the question is whether freight and insurance charges are to be included in the assessable value for the purposes of excise. This question is covered by the judgment of this Court in the case of Escorts JCB Ltd. v. Commissioner of Central Excise, Delhi-II (2002) 146 ELT 31. The only difference which has been pointed out is that in the Escorts case (2002) 146 ELT 31 the sale was at the factory gate whereas in these cases, the sale is from the depot. Learned counsel for the appellants admit that the freight and insurance charges up to the depot would be includible in the assessable value for the purposes of excise. However, the sale being at the depot, the freight and insurance for delivery to the customers from the depot would not be so includible as per the said judgment.
With the above clarification, the appeals stand allowed.
Appeals allowed.
