In 'FOR destination' contracts, where ownership and risk of goods transfer to the buyer only upon arrival at the destination, the buyer's premises constitutes the 'place of removal'; consequently, freight and insurance costs incurred by the seller are includible in the assessable value for Central Excise duty.

[Order per: A.K. JYOTISHI]

M/s KJV Alloy Conductors Pvt Ltd (hereinafter referred to as the appellant) are in appeal against the Order-in-Appeal dt.30.01.2012, whereby, the Commissioner (Appeals) has upheld the demand on merit and has also given certain relief in terms of quantum of duty and penalty, etc.

2. The issue, in brief, is that the department, based on scrutiny of purchase orders placed by certain Electricity Boards on the appellant, felt that the appellant was not including freight and insurance charged collected from them in the assessable value for the purpose of payment of Central Excise duty. On adjudication, the Original Authority confirmed the demand issued in terms of 2 SCNs covering the period from December, 2006 to January, 2012. While doing so, it was observed that in terms of said contracts and purchase orders, the goods were being sold at buyer’s premises only and the said place or locations was to be treated as the place of removal.

3. Commissioner (Appeals) also took similar view and held that transfer of possession of said goods in the instant case for the consideration agreed between the appellant and their customers took place at the customer’s premises and therefore, the place of sale or the place of removal was the buyer’s premises. He relied on the judgment in the case of CCE, Chandigarh Vs Punjab Tractors Ltd [2010 (259) ELT 123 (Tri-Del)] in support thereof.

4. Learned Counsel for the appellant has essentially contested that in their own cases, as under, the issue has been held in their favour relying on the judgment of Hon’ble Supreme Court in the case of CCCE, Nagpur Vs Ispat Industries Ltd [2015 (324) ELT 670 (SC)].

a) KJV Alloy Conductors Pvt ltd [Final Order No. A/30582-30587/2019 dt.01.07.2019 (CESTAT Hyderabad)]

b) KJV Alloy Conductors Pvt Ltd [Final Order No. A/56555/2017 dt.11.09.2017 (CESTAT Delhi)]

5. On the other hand, learned AR has submitted that as is apparent from the purchase orders and contract that the goods were being sold on “FOR destination basis” for delivery at the stores of customers by road and responsibility/ liability of the appellant included packing, forwarding and payment of unloading charges/ transit insurance etc. Moreover, the ownership of the goods rested with the appellant during the transit till the goods were delivered at the customer’s premises and the sale was completed only upon the delivery of the goods. He has rebutted the claim that the issue has already been decided in their favour on the ground that said two orders are per incuriam as it has not considered certain relevant case laws. He has also submitted that the issue is now squarely covered by the decision of this Bench in the case of Pawan Power and Telecom Ltd Vs CCT, Medchal [Final Order No. A/30181-30183/2025 dt.16.05.2025], which has a similar factual matrix. Therefore, there is no merit in the appeal filed by the appellant.

6. Heard both sides and perused the records.

7. The issue to be decided is whether certain payments being received by the appellant from their customers towards certain activities like loading, transportation, insurance, etc., are required to be included in the assessable value for the purpose of payment of Central Excise duty or otherwise. In order to decide this issue, it would be relevant to decide as to what would be the place of removal in the given factual matrix. We have perused the purchase orders issued by Southern Power Distribution Company of Andhra Pradesh Ltd, wherein, there are certain commercial clauses, which indicate that the date of delivery would be the date on which store officer certifies the receipt of material at stores in good condition. It also, inter alia, provid