M/S. Maruti Suzuki India Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Original No. 27-30/SA/CCE/2012 dated 20.7.2012 passed by Commissioner of Central Excise, Delhi III, Gurgaon ]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

Hon'ble Mr. 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 should 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 Departmental authorities?

M/s. Maruti Suzuki India Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Delhi III

Appearance:

Shri B L Narasimhan, Advocate for the Appellants

Shri Parmod Kumar, Jt.CDR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Mr. B Ravichandran, Member (Technical)

Date of Hearing /decision: 28.7.2015

FINAL ORDER NO. A/52358/2015-EX(DB)

Per Ashok Jindal :

The short issue involved in the matter is that whether the insurance charges for transit are required to be added in the assessable value post 1.7.2000 if the goods are sold at factory gate or not.

2. The facts of the case are that during the course of examination, it was found by the Revenue that appellant has collected after sales charges claiming as insurance transit charges and same were not added in the assessable value. Therefore, it was alleged that as per provisions of Rule 6 of Central Excise Valuation Rules, 2000, the insurance charges recovered from the buyers form additional consideration as per definition of transaction value as per Rule 4(3)(d) of Central Excise Valuation Rules. Therefore, show cause notice was issued to demand a sum of Rs. 37,96,91,593/- along with interest and proposal for equivalent amount of penalty was made. The adjudicating authority confirmed the proposal of the show cause notice. Against that order, appellant is before us.

3. Learned Counsel of the appellant submits that in their own case for the period post 1.7.2000, this Tribunal in the case of Maruti Udyog Ltd. vs. CCE, Delhi reported as [2003 (162) ELT 554 (Tri-Delhi)] on the identical issue held that the insurance charges are not includable.

4. He further submits that in the case of M/s. Triveni Glass Ltd. vs. CCE, Allahabad, Final Order No. A/792-793/2012-Ex(BR) dated 3.7.2012, on the identical issue for the period October, 2001 to March, 2006, the Tribunal held that transit insurance charges would not be includible in the assessable value of the goods. Therefore, he prayed that impugned order be set aside.

5. Heard the parties. Considered the submissions.

6. As the issue has already been settled by this Tribunal in the case of M/s. Triveni Glass Ltd. (supra) as well as in appellant own case wherein it has been observed as under:-

5.?We do not find any merit in the contention raised on behalf of the Revenue. The clause 20 of the agreement with the dealers do not in any way constitute a contract which is contrary to the definition of the term delivery under Section 2(12) of the Sale of Goods Act, 1930. When goods sold are identified and put in the hands of the transporter, it would amount to delivery of the same to the buyer in terms of the provisions contained under Section 39 of the Sale of Goods Act. This aspect has been considered elaborately by this Tribunal in its decision in Associated Strips Ltd. v. CCE, New Delhi - 2002 (143) E.L.T. 131 (T) = 2002 (49) RLT 506 which was approved by the Apex Court in Escorts JCB Ltd. On going through the terms of the agreement between the appellants and the dealers, the requests made by the dealers to the appellants to undertake transport of the vehicles, the invoices, the transport documents like lorry receipts and railway receipts, we find no reason to hold that the appellants case will not be covered by the ratio of the decisions of the Apex Court in Escorts JCB Ltd., and Prabhat Zarda Factory Ltd. As far as the demand for the period from 1-7-2000 is concerned the learned Counsel appearing on behalf of the Revenue submitted that it would not make any difference in the facts of the present case from the legal position available prior to 1-7-2000.

7. Therefore, we hold that charges towards transit insurance recovered by the appellant from the buyers are not includible in the assessable value. With these observations, we do not find any merit in the impugned order. Same is set aside. Appeal is allowed with consequential relief, if any.

( operative part of the order pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

( B Ravichandran )

Member(Technical)

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