2005 INSC 0441
                                    SUPREME COURT OF INDIA

                               Commissioner of Central Excise, Meerut

                                                      Vs.

                                          Majestic Auto Limited

                                             C.A.No.93 of 2000

                        (Mrs.Ruma Pal, Arijit Pasayat and C. K. Thakker JJ.)

                                                 20.04.2005

                                                   ORDER

1. We see no reason to interfere with the decision of the Tribunal particularly in view of the
decision of this Court in Baroda Electric Meters Ltd. v. Collector of Central Excise reported
in1. The appeal is, accordingly, dismissed with no order as to costs.

C.A. Nos. 1537/2001, 4321 & 4472-4473/2004:

2. The appellant manufactures two wheelers some of which are exported and some of which
are sold in the domestic market. According to the appellant, at the time of removal of the
goods for export, the appellant had taken recourse to the provision of the then applicable
procedure relating to the export of manufactured goods on bond, namely, the removal of
goods under Form AR-4. In that form, the appellant had mentioned not only the number of
scooters being exported but also the rate of duty and the amount payable thereon as required.
It is not in dispute that the goods which were exported no excise duty was in fact leviable
subject to the fulfilment of the conditions of the bond.

3. It is the case of the appellant that the Central Excise Officer had wrongly held that the
appellant was not entitled to claim exemption in respect of freight and insurance charges in
respect of the goods exported. According to the appellant the issue had been correctly
appreciated by the Commissioner (Appeals) when he had said that under Section 4 of the
Central Excise Act, 1944, there are no separate provisions for valuation of the goods meant
for export and that provisions contained under Section 4 were also applicable to goods meant
for export and that while determining the value of the exported goods the expenses incurred
on freight and insurance would have to be deducted.

4. The Tribunal proceeded on the basis as if the issue was whether the expenses incurred by
the appellant in transporting the goods meant for export were to be deducted from the price
of the goods sold for domestic consumption in arriving at the assessable value of the goods
sold domestically. The Tribunal held that the goods exported had no relation whatsoever with
the goods sold for domestic consumption and that the freight incurred by the appellant in

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relation to the exported goods were not deductible from the price of goods sold for domestic
consumption. As a proposition of law, there can be no dispute with regard to the conclusion
of the Tribunal.

5. However, the grievance of the appellant is that the question framed by the Tribunal was
wholly wrong. According to the appellant, it had never sought to include the freight incurred
for transporting the goods from the factory for export for computing the freight to be
deducted for fixing the assessable value of the goods cleared from home consumption. The
appellant has said that the Tribunal should have considered the matter in the light of the
following questions alone:

        "(1) Whether the calculation of equalized freight had to be determined on the basis of
        the total freight incurred on the transport of the goods manufactured and cleared by
        the manufacturer from its factory irrespective of the destination of the goods after
        clearance - whether for home consumption or for export ?

        (2) Whether the deduction of the freight incurred for the transportation of the goods to
        the port in the course of export could be allowed from the assessable value of such
        goods ?"

6. There appears to be some confusion as to the factual and legal basis on which the original
order of assessment had been passed. But it appears that the questions as formulated by the
appellant should have arisen for consideration by the Tribunal.

7. In that view of the matter, we set aside the order of the Tribunal and remand the matters
back to the Tribunal for determining the questions so formulated. The appeals are,
accordingly, disposed of but without any order as to costs.

11997 (22) RLT 5 (SC)

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