M/S Century Pulp & Paper vs Cce, Meerut Ii

[Arising out of the Order-in-Appeal No. 123/CE/MRT-II/2005 dated 27/06/2006 passed by The Commissioner of Central Excise (Appeals), Meerut  II.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

M/s Century Pulp & Paper Appellant

Versus

CCE, Meerut  II Respondent

Appearance

S/Shri B.L. Narsimhan and Vector Das, Advocates  for the appellant.

Shri R.K. Grover, Authorized Representative (DR)  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52647/2015 Dated : 20/08/2015

Per. Ashok Jindal :-

The appellants are manufacturer of various kind of papers which they are selling to their various sellers/customers at the factory gate. The transit insurance in some of the cases, has also been undertaken by them for which they were charging the customers separately at the rate of 0.4 % of the value of the goods. As the actual insurance expenses incurred by them are approximately to the tune of 0.4%, the Revenue raised the demand in respect of differential excess amount collected by them which stand confirmed by the impugned orders.

2. The contention of the learned advocate is that it is well settled law that even after the introduction of transaction value concept in terms of Section 4 of Central Excise Act, the excess insurance charges recovered by the appellant cannot form part of the assessable value. For the above proposition, he relied upon various decisions of the Tribunal including the one in the case of Gujarat Borosil Ltd. vs. CCE, Surat II reported in [2010 (253) ELT 610 (Tri)], as confirmed by the Honble Supreme Court reported as 2009 (233) ELT 501]. He also clarifies that rates of various papers collected by them from their customers irrespective of whether the insurance was undertaken by them or not, remained the same during the relevant period and further the insurance cover was being given to only those customers who opted for it. As such, the Revenues stand that such excess insurance charges recovered by them from their customers should form part of the assessable value, are not in accordance with the declared law by the Tribunal.

3. Learned DR appearing for the Revenue, fairly admits that according to the decision of the Tribunal, the legal position stands clarified but submits that the factual aspect i.e. whether the price of the goods to all the customers were the same or whether the fact of availing the insurance by the customers from the assessee was an optional matter or not.

4. We agree that the law point on the above disputed issue is settled by various decisions relied upon by the learned advocate. However, on going through the impugned orders we find that neither original adjudicating authority nor the appellate authority has examined and verified the fact as to whether the insurance coverage was an optional aspect or whether the cost of paper sold to the customers who opted for insurance was the same as the goods sold to the customers who do not opt for the same, though the very same plea was specifically raised before the lower authorities. As such, we are of the view that the above aspects require verification for which we set aside the impugned order and remand the matter to the original adjudicating authority for doing the needful and for re-deciding the matter in the light of various decisions, to which the appellant may refer to. The same view was taken by this Tribunal in appellant own vide final order No. A/56321/2013  EX (DB) dated 26/04/2013.

5. The appeal is thus allowed by way of remand.

(Dictated and pronounced in open court)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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