Case: Commissioner Central Excise, Mumbai-III Vs. M/s. EMCO Ltd

6 SCC 52 ), the Court took note of few more decisions, including the case of Escorts JCB Ltd., and reiterated the aforesaid principles but at the same time also emphasizing that the place of removal depends on the facts of each case.14) In a recent decision of this Court in Commissioner, Customs and Central Excise, Aurangabad v. M/s. Roofit Industries Ltd. ((2015) 5 SCALE 470 ), the position in law was summarized in the following manner: “12) The principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected namely whether it is on factory gate or at a later point of time i.e. when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is transferred from the seller to the buyer. The charges which are to be added have put up to the stage of the transfer of that ownership inasmuch as once the ownership in goods stands transferred to the buyer, any expenditure incurred thereafter has to be on buyers account and cannot be a component which would be included while ascertaining the valuation of the goods manufactured by the buyer. That is the plain meaning which has to be assigned to Section 4 read with Valuation Rules.” 15) Having stated the legal position, we now revert to the facts of the present case.16) The Commissioner, Central Excise while deciding that the transportation charges as well as transit insurance charges are to be included for fixing the transaction value. The order reveals that the Commissioner had scanned through the agreements entered into between the assessee and with various customers and other documents on the basis of which the Commissioner concluded that the property in goods was passed on to the customers only at the destination. According to him, there was a specific condition in the contracts that the goods will be dispatched from freight pre-paid by road and up to the destination of the customers. It was also stated that material should be dispatched duly insured by the assessee up to the customers destination and the cost towards obtaining insurance was included in the price. These contracts further contain a clear stipulation that in case of any damage to the goods during transit, the supplier will lodge the claim and obtain compensation from the insurance company. So much so, one Deputy Manager of the assessee, viz. Shri D.K. Bhattacharya in his statement, recorded under Section 14 of the Act, had specifically stated that “the responsibility of the goods lies on M/s. Emco till the delivery of the said goods to the customers premises and, therefore, freight incurred and transit insurance charges were recovered from the customers......for covering the transit risk they had taken out transit insurance policy and whenever there was a loss or damage to goods M/s. Emco claims the same from the insurance company.....the possession of the goods is transferred only at the premises of the buyers/customers”. The Commissioner also noted that the aforesaid statement was even confirmed by the General Manager of the assessee.17) The Tribunal did not bother to look into any of the aforesaid aspects and/or discussed the same. In a cryptic non-reasoned order, the Tribunal allowed the appeal. To be precise, the following order is passed: “Appellants were issued a notice proposing to levy duty in the value of amount of freight and transit insurance recovered by them but the same suppressed from the department as it appears from page 10G the show cause notice.2. It was confirmed after hearing both sides, it is found that the issue is well settled in favouring the assessee by the decision in the case of Associated Strips Ltd. [2002 (143) ELT 131-Trib.) which has been approved by the Apex Court in the case of Escorts JCB Ltd. Vs. Collector of Central Excise [2002 (146) ELT 31 (SC)]. Being bound by the same, this order impugned cannot be restrained and is to be set aside and appeal allowed.” 18) The perfunctory manner in which the appeal of the assessee is allowed, cannot be countenanced. If the Tribunal was confirming the decision of the Authority below, may be detailed discussion was not required as the reasons given in detail could be found in the order appealed against, though even in such a case brief reasons are to be given by the Tribunal, in particular, to meet the arguments which are advanced by the appellant while challenging such an order. However, in the instant case, we find that there is a detailed discussion in the order of the Commissioner on the facts of the case. Those facts are not adverted to or dealt with. The decision of the Commissioner is overruled with single observation that the case is covered by the judgment in Escorts JCB Ltd., without discussing as to how it was so covered. This is notwithstanding the fact that the decision as to which is the place of removal depends upon the facts of each case.19) The consequence of the aforesaid discussion would be to set aside the order of the Tribunal and remit the case to it for fresh consideration after looking into the facts of the present case, namely, the terms and conditions of the sale with the buyer and determination on that basis as to which was the place of removal, that is whether it was the factory gate of the assessee or the place of delivery. We may record that as per the Commissioner, place of removal was the place of delivery at the buyers premises. However, since no documents are produced before us, we are not in a position to comment as to whether the aforesaid view taken by the Commissioner is proper or not.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]18) The perfunctory manner in which the appeal of the assessee is allowed, cannot be countenanced. If the Tribunal was confirming the decision of the Authority below, may be detailed discussion was not required as the reasons given in detail could be found in the order appealed against, though even in such a case brief reasons are to be given by the Tribunal, in particular, to meet the arguments which are advanced by the appellant while challenging such an order. However, in the instant case, we find that there is a detailed discussion in the order of the Commissioner on the facts of the case. Those facts are not adverted to or dealt with. The decision of the Commissioner is overruled with single observation that the case is covered by the judgment in Escorts JCB Ltd., without discussing as to how it was so covered. This is notwithstanding the fact that the decision as to which is the place of removal depends upon the facts of each case.19) The consequence of the aforesaid discussion would be to set aside the order of the Tribunal and remit the case to it for fresh consideration after looking into the facts of the present case, namely, the terms and conditions of the sale with the buyer and determination on that basis as to which was the place of removal, that is whether it was the factory gate of the assessee or the place of delivery. We may record that as per the Commissioner, place of removal was the place of delivery at the buyers premises. However, since no documents are produced before us, we are not in a position to comment as to whether the aforesaid view taken by the Commissioner is proper orWe have extensively discussed the judgment in Escorts JCB Ltd. because of the reason that the Tribunal has allowed the appeal of the respondent herein with the observations that case of the respondent is covered by this judgment. We would like to point out at this stage that in Commissioner of Central Excise, Noida v. Accurate Meters Ltd. ((2009) 6 SCC 52 ), the Court took note of few more decisions, including the case of Escorts JCB Ltd., and reiterated the aforesaid principles but at the same time also emphasizing that the place of removal depends on the facts of each case.14) In a recent decision of this Court in Commissioner, Customs and Central Excise, Aurangabad v. M/s. Roofit Industries Ltd. ((2015) 5 SCALE 470 ), the position in law was summarized in the followingThe principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected namely whether it is on factory gate or at a later point of time i.e. when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is transferred from the seller to the buyer. The charges which are to be added have put up to the stage of the transfer of that ownership inasmuch as once the ownership in goods stands transferred to the buyer, any expenditure incurred thereafter has to be on buyers account and cannot be a component which would be included while ascertaining the valuation of the goods manufactured by the buyer. That is the plain meaning which has to be assigned to Section 4 read with ValuationHaving stated the legal position, we now revert to the facts of the present case.16)The Commissioner, Central Excise while deciding that the transportation charges as well as transit insurance charges are to be included for fixing the transaction value. The order reveals that the Commissioner had scanned through the agreements entered into between the assessee and with various customers and other documents on the basis of which the Commissioner concluded that the property in goods was passed on to the customers only at the destination. According to him, there was a specific condition in the contracts that the goods will be dispatched from freighty road and up to the destination of the customers. It was also stated that material should be dispatched duly insured by the assessee up to the customers destination and the cost towards obtaining insurance was included in the price. These contracts further contain a clear stipulation that in case of any damage to the goods during transit, the supplier will lodge the claim and obtain compensation from the insurance company. So much so, one Deputy Manager of the assessee, viz. Shri D.K. Bhattacharya in his statement, recorded under Section 14 of the Act, had specifically stated thaty of the goods lies on M/s. Emco till the delivery of the said goods to the customers premises and, therefore, freight incurred and transit insurance charges were recovered from the customers......for covering the transit risk they had taken out transit insurance policy and whenever there was a loss or damage to goods M/s. Emco claims the same from the insurance company.....the possession of the goods is transferred only at the premises of thee Commissioner also noted that the aforesaid statement was even confirmed by the General Manager of the assessee.17) The Tribunal did not bother to look into any of the aforesaid aspects and/or discussed the same. In a cryptic, the Tribunal allowed the appeal. To be precise, the following order ise issued a notice proposing to levy duty in the value of amount of freight and transit insurance recovered by them but the same suppressed from the department as it appears from page 10G the show cause notice.2. It was confirmed after hearing both sides, it is found that the issue is well settled in favouring the assessee by the decision in the case of Associated Strips Ltd. [2002 (143) ELTwhich has been approved by the Apex Court in the case of Escorts JCB Ltd. Vs. Collector of Central Excise [2002 (146) ELT 31 (SC)]. Being bound by the same, this order impugned cannot be restrained and is to be set aside and appeal