COMMISSIONER OF CENTRAL EXCISE, NOIDA versus M/S. ACCURATE METERS LTD.

Citation: [2009] 3 S.C.R. 1146 · Decided: 03-03-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

[2009] 3 S.C.R. 1146 
A 
COMMISSIONER OF CENTRAL EXCISE, NOIDA 
• 
v. 
MIS. ACCURATE METERS LTD. 
(Civil Appeal No. 5901 of 2006) 
B 
MARCH 3, 2009 
[S.B. SINHA, ASOK KUMAR GANGUL Y AND R.M. 
LODHA, JJ.] 
Central Excise Act, 1944 - s.4 - Central Excise 
c Valuation (Determination of Price of Excisable Goods) Rules, 
2000 - rr. 4 and 5 - Two separate contracts entered into by 
and between assessee and the State Electricity Boards; one 
in respect of supply of electric meters and another for 
transportation and transit insurance thereof - Assessee was 
D to transport the goods from factory gate to the place of State 
Electricity Boards at specified rates - Computation of Excise 
Duty - Dispute over valuation of goods - Whether amount 
claimed by way of transportation charges and insurance could 
be considered for determining the value of the electric meters 
E supplied - Held, No. 
Goods were supplied by respondent-assessee to the 
State Electricity Boards in terms of the stipulations 
contained in the advertisements issued by them. Two 
F 
separate contracts were entered into by and between the 
respondent and State Electricity Boards therefor; one in 
respect of the supply' of the electric meters and another 
for transportation and transit insurance thereof. 
Whether 'freight' and 'insurance charges' constitute 
G the value of the goods for the purpose of computation 
of Excise Duty in terms of Central Excise Act, 1944 and 
the Central Excise Valuation (Determination of Price of 
Excisable Goods) Rules, 2000 is the question involved in 
the present appeal. 
H 
1146 
COMMISSIONER OF CENTRAL EXCISE, NOIDA v. M/S. 
1147 
ACCURATE METERS LTD. 
Dismissing the appeal, the Court 
HELD: 1. In the present case, there were two separate 
contracts; one for sale of Electricity Meters which was 
governed by the provisions of the Sale of Goods Act, and 
A 
the other governing transportation of the goods. The 
8 
charges for transportation of the goods were not on 
actual basis. Respondent was bound to transport the 
goods from the factory gate to the place of the State 
Electricity Boards at the rates specified in the tender. Prior 
thereto, the State Electricity Board Authorities were to C 
make inspection of the goods. [Para 12] [1154-F] 
2. The authority in appeal as also the Tribunal were 
correct in their view that the amount claimed by way of 
transportation charges and insurance cannot be 
considered for determining the value of the electric D 
" 
meters supplied .. (Para 15] [1157-E] 
Mis Escorts JCB Ltd. v. CCE, Delhi 2002 (146) ELT 31 
(SC}, relied on. 
Associated Strips Ltd. vs. Commissioner of Central 
E 
Excise, New Delhi (2002) 143 ELT 131 and Commissioner 
vs. Prabhat Zarda Factory Ltd. (2000) 119 EL T 191, referred 
" 
to. 
Case· Law Reference: 
2002 (146) ELT 31 (SC) 
relied on 
(2002) 143 ELT 131 
referred to 
(2000) 119 ELT 191 
referred to 
Para 3 
Para 13 
Para 13 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
5901 of 2006. 
From the Judgment & Order dated 31.12.2004 in Appeal 
F 
G 
No. E/4404/04-NB- by the Customs, Excise and Service Tax 
H 
1148 
SUPREME COURT REPORTS 
[2009] 3 S.C.R. 
A Appeal Tribunal, Bench-A, West Block No.2, R.K. Puram, New 
Delhi-110066. 
Vikas Sharma, Sanjeev K. Bhardwaj and Anil Katiyar for 
B. Krishna Prasad for the Appellants. 
B 
Rajesh Chibber and Rajesh Kumar for the Respondents. 
The Judgment of the Court was delivered by 
S.B. SINHA, J. 1. Whether 'freight' and 'insurance 
c charges' constitute the value of the goods for the purpose of 
computation of Excise Duty in terms of Central Excise Act, 1944 
(for short, "the Act") and the Central Excise Valuation 
(Determination of Price of Excisable Goods) Rules, 2000 (for 
short, "the Rules") is the question involved in this appeal. 
D 
2. Respondent is engaged in the manufacture of 'electric 
meters' and parts thereof falling under Chapter Sub-heading 
No. 9028.00 and 9033.00 of First Schedule to the Central 
Excise Tariff Act, 1985. Its customers, inter alia, are various 
State Electricity Boards constituted and incorporated under the 
E Electricity (Supply) Act, 1948. Indisputably, the State Electricity 
Boards in terms of advertisements issued in this behalf called 
for quotation for supply of electric meters. The value of the 
electric meters was to be fixed as at the factory gate. Freight 
and the insurance charges, however, as stipulated therein, were 
F to be charged on an average basis and not on actuals. 
Inter alia on

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