Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench at Ahmedabad REGIONAL BENCH-COURT NO. 2 Excise Appeal No. 10505 of 2020-DB (Arising out of OIA-VAD-EXCUS-001-AAP-558-2019-20 Dated 20/03/2020 passed by Commissioner (Appeals), CGST & Central Excise -Vadodara)

NISHANT ORGANIC PVT LTD ........Appellant

1002-1003, THE IMPERIA, OPP. SHASHTRI MAIDAN, LIMBDA CHOWK RAJKOT, GUJARAT VERSUS C.C.E. & S.T.-VADODARA-I ........Respondent

1ST FLOOR...CENTRAL EXCISE BUILDING, RACE COURSE CIRCLE, VADODARA, GUJARAT-390007 APPEARANCE:

Shri P V Sheth, Advocate appeared for the Appellant Shri R R Kurup, Superintendent (AR) appeared for the Respondent CORAM:

HON'BLE MEMBER (JUDICIAL), DR. AJAYA KRISHNA VISHVESHA HON'BLE MEMBER (TECHNICAL), MR. SATENDRA VIKRAM SINGH Final Order No. 10248/2026 DATE OF HEARING: 25.11.2025 DATE OF DECISION: 07.04.2026 SATENDRA VIKRAM SINGH M/s Nishant Organics Private Limited, Vadodara (Appellant) are engaged in manufacturing of Aromatic Chemicals like DI ETHYL PHTHALATE and DI METHYL PHTHALATE. W.e.f. 01.09.2016, M/s Lakshya Enterprises Private Ltd, Vadodara also merged with M/s Nishant Organics.

1.1 During audit of their records, the officers observed that the appellant has charged and collected certain amounts towards Freight and Insurance from their customers on account of delivery of finished goods at the buyer’s place but they have not included the said charges in the value of the goods for payment of Central Excise duty. As per the records, appellant had responsibility of the finished goods till these were handed over at the buyer’s place. Considering the buyer’s destination as place of removal, the appellant had paid the service tax on freight /transportation charges collected from the buyers and also availed the Cenvat credit of the same in their factory.

1.2 After conducting the investigation and collection of details of freight and insurance charges, Revenue issued a show cause notice dated 21.08.2019 to the appellant for demanding Central Excise duty of Rs.2,69,101/- (including Education Cess and Secondary & Higher Education Cess) under Section 11A(4) of the Central Excise Act,1944 along with interest under Section 11AA and penalty under Section 11AC of the said Act read with Rule 25 of the Central Excise Rules,2002. The show cause notice was adjudicated by the Assistant Commissioner vide order dated 20^th December,2019, wherein he held that transportation and insurance charges so collected by the appellant from their buyers in respect of door delivery of goods are includable in the assessable value of the finished goods for payment of central Excise duty. He confirmed the above demand along with interest and also imposed penalty of equal amount under Section 11AC(1)(e) of the Central Excise Act,1944 read with Section 174 of the CGST Act,2017.

1.3 Aggrieved with this order, the appellant filed appeal before the learned Commissioner (Appeals) who vide impugned order dated 28^th March,2020 rejected appeal of the party and upheld the decision of the lower authority.

Hence, the present appeal before this Tribunal.

2. In their appeal, the appellant took the following grounds:-

• The Appellate Authority has erred in confirming the demand without considering the decisions of Hon’ble Supreme Court as referred to in their submissions made as also the decision of CESTAT. The department on one hand has confirmed the demand of duty while rejecting their claim to avail credit of service tax on transportation charges. While rejecting their Cenvat credit claim, the department has concluded that transactions are not on FOR basis. Therefore, in both the cases, conclusion drawn by the departmental officers are contradictory.

• The Appellate Authority also erred by ignoring Rule 5 of the Central Excise Valuation Rules, 2000, as per which the said income is not includable in the value. He also upheld invocation of extended period of limitation in this case ignoring the fact that the department had knowledge of such activity