(a)

I confirm the Central Excise Duty of Rs. 29,44,101/-

(Twenty Nine Lakhs forty-four Thousand one hundred and one

only) due, but not paid on the goods, by the assessee under

proviso to Section 11A(1) of Central Excise Act, 1944,

E/85233/2013

2

(b)

I impose penalty of Rs. 29.44,101 (Rupees Twenty nine

lakhs forty four thousand one hundred and one only) on them

under Section 11AC of the Central Excise Act, 1944 read with

Rule 25 of the Central Excise Rules, 2002.

(c)

I charge interest at appropriate rate for the relevant

period, on short payment of duty, from them under Section

11AB of Central Excise Act.”

2.1

Appellant is having manufacturing unit at Kanjurmarg,

Mumbai and was procuring order for dispatching transformers

directly to the site of the customer through their EPD (Project

Division) at Chennai. In terms of this order the goods were

directly dispatched to the consignee as the project for which the

goods were meant and the customer was shown as EPD division

at Chennai. For recovering the freight from the customer during

the year 2001-02 and 2002-03 they raised debit notes for

Rs.1,84,00,000/- and Rs.630/-. These freight charges were not

made part of the assessable value taken for payment of duty.

2.2

A show cause notice dated 21.03.2006 was issued to the

appellant asking them to show cause as to why:-

“(a) Duty of Rs.29,44,101/- (Twenty-nine Lakhs forty-four

thousand one hundred and one only) due, but not paid, on the

goods, should not be demanded and recovered from them under

proviso to Section 11 A(1) of Central Excise Act, 1944.

(b)

Penalty should not be imposed on them under Section

11AC of the Central Excise Act, 1944 read with Rule 25 of the

Central Excise Rules, 2002.

(c)

Interest should not be charged on short payment of duty

which also should not be recovered from them under Section

11AB of Central Excise Act, 1944.”

2.3

The show cause notice was adjudicated by the Additional

Commissioner as per the order referred to in para 1 above and

appeal against the same has been dismissed by the impugned

order.

E/85233/2013

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3.1

We have heard Shri Aditya Chitale, Advocate and Shri

Sunil

Kumar

Katiyar,

Assistant

Commissioner,

Authorised

Representative for the Revenue.

3.2

Arguing for the appellant, learned counsel submits:-



In the present case the place of removal of the goods was

from the factory gate at Mumbai. In fact that is well

established from the invoices raised for clearance of the

goods. Therefore the proceedings whereby the freight

element is sought to be added stating place of removal as

EPD Chennai is not proper.



Duty has been correctly paid on the basis of the assessable

value determined on the basis of transaction value with the

customer.



Rule 5 of Central Excise Valuation Rules is not applicable in

the present case.



Accordingly by making such a demand, the impugned order

has proceeded on incorrect presumption of the fact as the

goods were dispatched by the appellant directly from their

factory to the site of the ultimate customer and not to the

EPD. The impugned order is bad in law and liable to be set

aside.



The show cause notice is time barred. The goods were

dispatched during the period 01.04.2001 to 31.03.2003 and

excise duty was paid thereon as reflected in the ER-1

return. The show cause notice has been issued on

27.03.2006 i.e. much beyond the normal period of

limitation.



In support he would rely on the following decisions:-



Bathinda

Industrial

Gases

Pvt.

Ltd.

[MANU/CE/0426/2022]



Jindal Tubular (India) Ltd. [MANU/CE/0254/2022]



Ispat Industries Ltd. [2015 (14) SCC 712]



Paper Products Ltd. [2016-TIOL-73-CESTAT-MUM]



PSL Ltd. [2005 (185) ELT 59]



West Coast Paper Mills Ltd. [2004 (172) ELT 493].

3.3

Learned AR reiterates the findings recorded in the

impugned order.

E/85233/2013

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4.1

We have considered the impugned order along with the

submissions made in appeal and during the course of arguments.

4.2

For

dismissing

appeal

filed

appellant,

Commissioner (Appeals) has in