"(1) CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Regional Bench - Court No. – I Excise Appeal No. 30885 of 2017 (Arising out of Order-in-Appeal No.HYD-EXCUS-001-APP-140-16-17 dt.28.02.2017 passed by Commissioner of Customs & Central Excise (Appeals), Hyderabad) ION Exchange India Ltd Plot No.19, Phase-II, IDA, Patancheru, Medak District, Telangana – 502 300 ......Appellant VERSUS Commissioner of Central Tax Medchal - GST Kendirya Shulk Bhavan, LB Stadium Road, Basheerbagh, Hyderabad – 500 004 ……Respondent with Excise Appeal No. 31042 of 2017 (Arising out of Order-in-Appeal No.HYD-EXCUS-MD-AP2-0019-17-18-CE dt.22.08.2017 passed by Commissioner of Customs & Central Excise (Appeals), Hyderabad) ION Exchange India Ltd Plot No.19, Phase-II, IDA, Patancheru, Medak District, Telangana – 502 300 ......Appellant VERSUS Commissioner of Central Tax Medchal - GST Kendirya Shulk Bhavan, LB Stadium Road, Basheerbagh, Hyderabad – 500 004 ……Respondent with Excise Appeal No. 31236 of 2017 (Arising out of Order-in-Appeal No.HYD-EXCUS-MD-AP2-0020-17-18-CE dt.22.08.2017 passed by Commissioner of Customs & Central Excise (Appeals), Hyderabad) ION Exchange India Ltd Plot No.19, Phase-II, IDA, Patancheru, Medak District, Telangana – 502 300 ......Appellant VERSUS Commissioner of Central Tax Medchal - GST Kendirya Shulk Bhavan, LB Stadium Road, Basheerbagh, Hyderabad – 500 004 ……Respondent and Excise Appeal No. 31274 of 2017 (Arising out of Order-in-Appeal No.HYD-EXCUS-001-APP-044-17-18 dt.19.06.2017 passed by Commissioner of Customs & Central Excise (Appeals), Hyderabad) ION Exchange India Ltd Plot No.19, Phase-II, IDA, Patancheru, Medak District, Telangana – 502 300 ......Appellant VERSUS Commissioner of Central Tax Medchal - GST Kendirya Shulk Bhavan, LB Stadium Road, Basheerbagh, Hyderabad – 500 004 ……Respondent (2) Appearance:- Shri Ch. Sumanth, Advocate for the Appellant. Shri K. Sreenivasa Reddy, AR for the Respondent. Coram: HON'BLE MR. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE MR. ANGAD PRASAD, MEMBER (JUDICIAL) FINAL ORDER No. A/30084-30087/2025 Date of Hearing: 18.03.2025 Date of Decision: 18.03.2025 [Order per: A.K. JYOTISHI] M/s ION Exchange India Pvt Ltd (hereinafter referred to as the appellant) are in appeal against the orders passed by the Commissioner (Appeals), as per the details below:- Appeal No. E/30885/2017 E/31236/2017 E/31274/2017 E/31042/2017 Order- in- Appeal No. & Date HYD-EXCUS- 001-APP-140- 16-17 dt.28.02.2017 HYD-EXCUS-MD- AP2-0019-17- 18-CE dt.22.08.2017 HYD-EXCUS-MD- AP2-0020-17- 18-CE dt.22.08.2017 HYD-EXCUS-001- APP-044-17-18 dt.19.06.2017 OIO No. & Date 09/2015-CE dt.30.09.2015 11/2016-17 d.27.10.2016 12/2016-17 dt.27.10.2016 05/2016-17 dt.30.08.2016 Period of dispute April 2013 to December 2013 January 2014 to June 2014 July 2014 to January 2015 February 2015 to June 2015 SCN No. & Date C.No.IV/9/10/ 2014-Adjn dt.05.05.2014 C.No.IV/9/10/20 14-Adjn dt.29.12.2014 C.No.IV/9/10/20 14-Adjn dt.03.08.2015 C.No.V/38/15/20 16-Adjn dt.03.02.2016 Amount involved Rs.1,09,785/- along with interest Rs.3,82,343/- along with interest Rs.4,37,962/- along with interest Rs.3,87,826/- along with interest Penalty imposed Rs.1,09,785/- u/s 11AC of Central Excise Act, 1944. NA NA Rs.3,87,826/- U/R.25(1)(d) of Central Excise Rules, 2002. 2. The short question in all these appeals is inclusion of freight charges in the transaction value for charging Central Excise Duty. According to the department, in these cases, the sale has not taken place ex-factory and therefore, the freight charges are liable to be included when the sale has taken place at the buyer’s premises. The Adjudicating Authority has upheld the demand confirmed by the Lower Adjudicating Authority relying on judgments of Hon’ble Supreme Court in the case of CCE, Aurangabad Vs Roofit Industries [2015 (319) ELT 221 (SC)] and in the case of CCE, Mumbai-III Vs Emco Ltd [2015 (322) ELT 394 (SC)]. (3) 3. Learned Advocate for the appellant submits that there are two sets of purchase orders. In one set, there is a sale ex-works, while in the other set, there might be delivery at the buyer’s premises. However, in all these cases, the freight, per se, is not includable in view of the judgment of Hon’ble Supreme Court in the case of CCE, Nagpur Vs Ispat Industries Ltd [2015 (324) ELT 670 (SC)] as buyer’s premises can never be a place of delivery. He also submits that insurance coverage for transportation of goods from the factory to the buyer’s premises is provided by the buyer themselves and they are not providing any insurance coverage. However, in some cases, they might have even provided the same. Secondly, he is submitting that the freight charges being charged is on an agreed price and not on actual basis, which may be higher or lower than the actual freight paid by them and it is shown separately in the invoice in addition to the transaction value. He further submits that in their own case, matter has already been decided by this bench in their favour and further, learned AR points out that said decision of the Tribunal is passed without considering the judgment of Larger Bench of this Tribunal in the case of Ramco Cements Ltd Vs CCE, Puducherry [Interim Order No.40020/2023 dt.21.12.2023]. 4. Learned AR, on the other hand, submits that it is settled matter that in the case of delivery on FOR basis, the amount of freight and insurance is required to be added to the transaction value and the place of delivery would be the customer’s premises. He is submitting that the issue is no longer res integra in the sense that Larger Bench of this Tribunal in the case of Ramco Cements Ltd Vs CCE, Puducherry (supra) has considered both judgments i.e., Roofit Industries (supra) and Ispat Industries Ltd (supra), to come to the conclusion as to whether these amounts are required to be added or otherwise. Since in this case, the facts are clearly showing that goods were meant for delivery at the buyer’s premises, relying on the judgment in the case of Roofit Industries (supra) and Emco Ltd (supra), the demand is sustainable as rightly upheld by the Commissioner (Appeals). 5. Heard both sides and perused the records. 6. We find that the issue lies in a narrow compass. It is to be decided whether the freight charges are liable to be included in the transaction value or otherwise. We also note that there is some ambiguity as regards nature of Purchase Orders (P.O.) which throw some light whether the sale was (4) meant for ex-works or it was on FOR basis. It is obvious that in view of the judgments cited by the learned AR in the case of sale on FOR basis, both these judgments held that such amounts are required to be added to the assessable value. However, if the sale was ex-works then relying on the judgment of Ispat Industries Ltd (supra), the same would not be included. It is a matter of fact, which has not been brought out clearly in the impugned order and therefore, it needs to be remanded back to the Original Adjudicating Authority, who shall examine all the relevant documents to be provided by the appellant to come to the conclusion whether sale is ex- works or ex-factory and thereafter, based on the other observations in the earlier para, decide whether the amounts of freight and insurance can be added to the transaction value or otherwise. Since both types of sale could be there, he would have to redetermine the demand amount. 7. Insofar as the issue of imposition of penalty under Rule 25(1) of Central Excise Rules read with section 11AC(c) of the Central Excise Act is concerned, the appellants are mainly contesting that the penalty is not leviable as there is no element of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or Rules made thereunder with intent to evade payment of duty. They further submitted that department has been issuing periodical SCN on this issue and therefore, they already had the knowledge of the transaction undertaken by the appellant. They are also canvassing that they were having a bonafide belief that the freight amount collected from the customer is not includable in the assessable value for the purpose of payment of Excise Duty. Their view was fortified by the judgment of Hon’ble Supreme Court in the case of Ispat Industries Ltd (supra). We find that the issue whether the freight charges can be included or otherwise was subject matter of various decisions of the Hon’ble Supreme Court and High Courts, Tribunals, etc., and there were different views on this issue especially in terms of the judgment of Hon’ble Supreme Court in the case of Roofit Industries (supra) and Emco Ltd (supra) on one hand and Ispat Industries Ltd (supra) on the other. Moreover, the Board has also to come out with certain clarificatory circular to clarify as to in what situation the freight charges are includable or otherwise having regard to various case laws and factual matrix. Thus, we find that in the facts of the case, there is no positive evidence on record suggesting that the appellants have (5) deliberately chose not to pay Excise Duty on freight charges and suppressed any information with intent to evade the payment of duty. Therefore, the penalty invoked in terms of section 11AC(c) of the Act is not sustainable. 8. With these observations and directions, the matter is remanded back to the Original Adjudicating Authority. Appellants are also directed to submit all the relevant records within a period of two months and the Original Adjudicating Authority shall decide the matter within a period of one month from the date of submission of documents by the appellant. 9. Accordingly, appeals are allowed by way of remand. (Dictated and pronounced in the Open Court) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) Veda "