COMMISSIONER CENTRAL EXCISE, MUMBAI-ILLversusMIS. EMCO LTD.

                    [2015] 9 S.C.R. 925


     COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill                    A
                              v.
                      MIS. EMCO LTD.
              (Civil Appeal No. 3418 of2004) ·
                                                                B
                       JULY 31, 2015
          [A. K. SIKRI AND N. V. RAMANA, JJ.]
      Central Excise Act, 1944...:. s.4(3)(d) [as substituted by
s. 94 of Finance Act, 2000] - Transaction value -               c
Ascertainment of- Payment of excise duty by assessee on
the price at which the goods were sold to its consumers -
Demand of Revenue at the price by including the
transportation cost and transit insurance cost - Whether the
cost of freight and transit insurance is to be· included in the
                                                                 0
'transaction value' - Held: Inclusion of cost of freight and
insurance cost, depends upon the place of removal of the
goods - If the goods are cleared at the factory gate, then the
freight and insurance cost are not to be included in the
valuation of the goods - In the present case, plea of revenue
that place of removal of the goods in question were not at E
factory gate of assessee but at the buyer's premises - The
Tribunal without discussing this aspect, in a cryptic non-
reasoned order, allowed the appeal of the assessee - Hence,
the matter remitted to the Tribunal for considering the matter
afresh - Central Excise (Valuation) Rules, 1975 - Central F
Excise (Determination of Price of Excisable Goods)Rules,
2000.

     Allowing the appeals and remitting the matter to
Customs Excise and Gold (Control) Appellate Tribunal,           G
the Court

    HELD: 1. Section 4 of Central Excise Act was
substituted by new Section 4 with effect from 01.07 .2000
by Section 94 of the Finance Act, 2000, whereby the             H
                         925
926        SUPREME COURT REPORTS              [2015] 9 S.C.R.

A concept of 'transaction value' was introduced. From the
  same day, the Central Excise (Valuation) Rules, 1975
  were also substituted by the Central Excise
  (Determination of Prices of Excisable Goods) Rules,
  2000. Therefore, in the present case, the assessment
B period from 28.09.1996 to 30.06.2000 shall be covered
  by the old provisions and the a~sessment period from
  01.07 .2000 to 31.12.2000 shall be covered by the
  amended provisions. [Para 7] [930-G-H; 931-A]

C       2. Under old Section 4, the basis of value was the
  normal price at which the goods were ordinarily sold in
  the course of wholesale trade, under the new provision,
  the value is to be calculated at the time of removal of the
  goods and it has to be on the value of the goods. Further,
D this value has to be 'transaction value'. [Para 9] [933-H;
  934-A, 8-C]

            3. The issue as to whether the cost of freight and
      transit insurance is to be included or not depends upon
 E    the place of removal. 'Place of removal' is the place or
      premises from where the excisable goods are to be sold
      after their clearance from the factory and Jrom where
      such goods are removed. If the goods are cleared at the
      factory gate, then the excise duty has to be charged on
 F    the valuation of the goods to be arrived at the factory
      gate as that would be the place of removal of goods. It
      would mean that the expenses which are incurred after
      the removal of goods from the factory gate namely
      freight, insurance and unloading charges etc. are not to
 G    be included in the valuation of the goods for the
      purposes of excise duty. The reason is that the.sale of
      goods to the buyer is at the factory gate when the
      property passes to the buyer and the aforesaid
 H    expenditure are thereafter incurred by the buyer. [Paras
      10, 11and12] [934-D-E, H; 935-A-B]
COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S.              927
                EMCOLTD .
                           . .,;
                          ,..
     Escorts JCB Ltd. v. Collector of Central Excise         A
     2002· (146) ELT 31 (SC); Commissioner of
     Central Excise, Noida v. Accurate Meters Ltd. 2009
     (3) SCR 1146: (2009) 6 SCC 52; Commissioner,
     Customs and Central Excise, Aurangabad v. M/s.
     Roofit Industries Ltd. (2015) 5 SCALE 470 -             B
     relied on.

     4. There is a detailed discussion in the order of the
Commissioner on the facts of the case. The Tribunal
without going into any of the aspects and/or discussing C
the same, in a cryptic non-reasoned order, allowed the
appeal. Therefore, the order of th~ Tribunal is set aside
and the case is remitted 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 D
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. As per the
Commissioner, place of removal was the place of delivery
at the buyer's premises. However, since no documents E
are produced before this Court, it cannot be said as to
whether the aforesaid view taken by the Commissioner
is proper or not. [Paras 18, 17 and 19] [942-C-D; 941-B,
HJ                                                           F
                  Case Law Reference
2002 (146) ELT 31 (SC)             referred to.   Para 4
2009 (3) SCR 1146                  referred to.   Para 13
(2015) 5 SCALE 470                 referred to.   Para 14    G
     CIVIL APPELLATE JURISDICTION: Civil Appeal No.
3418 of2004

     From the Judgment and Order No. C-11/282/WZB/04
dated 02.01.2004 of the Customs, Excise and Gold (Control)   H
928        SUPREME COURT REPORTS                   [2015] 9 S.C.R.


A     Appellate Tribunal, Western Zonal Bench, Mumbai in Appeal
      No. E/3026/02.
                                 WllH
      C.A. No. 8966 OF 2011
B
           K. Radhakrishnan, Shirin Khajuria, Arijit Prasad, B.
      Krishna Prasad fortheAppellant.

           V. Lakshmikumaran, Prakash Shah, Jay Savla, L.
C     Charanya, Vivek Sharma, Hemant Bajaj, Aditya Bhattacharya,
      Ambarish Pandey, R. Ramchandran, Anandh K., M. P.
      Devanath for the Respondent.

           The Judgment of the Court was delivered by

 D         A. K. SIKRI, J. 1. The respondenUassessee herein
   manufactures transformers. The supply of these transformers
   by the assessee is primarily to the State Electricity Boards.
   The assessee is exigible to the levy of Central Excise under
   Central Excise Act, 1944 (hereinafter referred to as the 'Act').
 E Goods, namely, the transformers which are cleared by the
   assessee were supplied to the State Electricity Boards. These
   are subject to excise duty which the assessee has been paying
   to the appellant herein (hereinafter referred to as the
   'Revenue"). The dispute in the present case, however, is about
 F th_e 'transaction value' on which the excise duty is payable under
   Section 4 of the Act. The assessee is paying the duty on the
   price at which the said transformers are sold to the Electricity
   Boards. However, the Revenue wants that while arriving at the
 G price of the said goods, transportation cost and transit
   insurance cost be also included to arrive at the correct
   transaction value in terms of Section 4(3)(d) of the Act.

        2. Since the assessee was not including the
   transportation and transit insurance cost, a show cause notice
 H was issued on 24.07.2001 proposing to recover a sum of Rs.
COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S.                   929
          EMCO LTD. (A. K. SIKRI, J.]

1, 17,36,766/- on account of short excise duty paid for the period A
28.09.1996 to 31.12.2000. In this show cause notice, it was,
inter alia, alleged that the transit insurance policies reveal that
the assessee had been keeping the custody of the goods with
it during the transit. Further, the agreement with various
customers nowhere suggested that the transporter was to take B
the delivery of goods on behalf of the customers. The transit
insurance from the assessee's works upto the stores sites
where the goods were to be delivered at the buyer's premises
under the contract, was on assessee's account. On that basis,
the show cause notice contended that the transaction value C
would include the amount charged on account of transportation
and transit insurance as it was covered by the definition of
 'transaction value' contained in Section 4(3)(d) of the Act. The
assessee refuted the aforesaid averments in the show cause
                                                                    0
notice with the plea that sale of goods to the customers took
place at the factory gate of the assessee which was the 'place
of removal' of the goods. Merely because the assessee
arranged for transportation as well as transit insurance at the
request and instance of the customers, there was no reason E
to include the cost thereof as transaction value had to be
calculated upto the 'place of removal' and the expenses
incurred thereafter were not to be included.

     3. The aforesaid defence of the assesse~ did not cut          F
any ice with the adjudicating authority and repelling the
contention of the assessee, demand in the show cause notice
was confirmed by the Commissioner, Central Excise vide his
Order-in-Original dated 18.08.2002. This order was challenged
by the assessee in the form of appeal before the Customs           G
Excise and Gold (Control) Appellate Tribunal (for short,
'CEGAT'). CEGAT has allowed the appe;ial simply by
mentioning that the issue stands settled in favour of the
assessee by the decision of the Tribunal which has been
approved by the Supreme Court.                                     H
930            SUPREME COURT REPORTS                 [2015]9 S.C.R.


A           4. The argument of the Revenue in the present appeals,
      preferred against the aforesaid order, is that the matter was
      not so simple which could be covered within the four corners
      of the judgment of this Court in Escorts JCB Ltd. v. Collector
      of Central Excise 1 , relied upon by the Tribunal. He submitted
B     that there have been various nuances, intricacies and features
      of the present case which were required to be discussed
      before the conclusion could be arrived at that the case is
      covered by the said judgment. His submission was that there
      were many distinguishing features which are not taken note of
C     and, obviously, not discussed afld a non-reasoned cryptic order
      is passed by the Tribunal.

       5. Learned counsel for the respondent, on the other hand,
  made persistent effort to justify the order of the Tribunal with
D the submission that the case was squarely covered by the
  judgment of this Court in Escorts JCB Ltd. case.

            6. We have considered the submissions of both the
      sides. Indubitably, the duty of excise is chargeable on
E     excisable goods with reference to the value of those goods.
      Section 4 of the Act deals with the valuation of such goods for
      the purpose of levying excise duty as the excise duty is to be
      levied on the 'transaction va/ue'that has to be arrived at in the
      manner prescribed in the said provision as well as the rules
 F    framed thereunder.                 ·

        7. As pointed out above, show-cause notice in the instant
  case covers the period from 28.09.1996 to 31.12.2000.
  Section 4 was different prior to 01.07.2000. Section 4 was
G substituted by new Section 4 with effect from 01.07.2000 by
  Section 94 of the Finance Act, 2000, whereby the concept of
  'transaction value'was introduced. From the same day, the
  Central Excise (Valuation) Rules, 1975 were also substituted
  by the Central Excise (Determination of Prices of Excisable
H     1
          2002 (146) ELT 31 (SC)
 COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S. 931
           EMCO LTD. [A. K. SIKRI, J.)

Goods) Rules, 2000 Therefore, the period from 28.09.1996 A·
to 30.06.2000 shall be covered by the old provisions and the
period of show-cause notice from 01.07.2000 to 31.12.2000
shall be covered by the amended provisions. Section 4, as it
stood prior to amendment, reads as under:
                                                             B
      "Section 4. Valuation of excisable goods for
      purposes of charging of duty of excise. - (1)
      \/\/here under this Act, the duty of excise is
      chargeable on any excisable goods with reference
      to val~e. such value, shall, subject to the other      c
      provisions of this section, be deemed to be-

     (a) the normal price thereof, that is to say the price
     at which such goods are ordinarily sold by the
     assessee to a buyer in the course of wholesale           D
     trade for delivery at the time and place of removal,
     where the buyer is r.ot a related person and the
     price is the sole consideration for the sale.

     Provided that -                                          E
              xx             xx             xx
     (4) For the purposes of this S.ection -

              xx             xx             xx                F
     (b) "Place of removal" means:

              xx             xx             xx
     (ii) a warehouse or any other place or premises          G
     wherein the excisable gods have been permitted
     to be deposited without payment of duty.

     (iii) a depot, premises of a consignment agent or
     any other place or premises from where the               H
932        SUPREME~OURTREPORTS                         [2015] 9 S.C.R.

"A        excisable goods are to be sold after their clearance
          from the factory and from where such goods are
          removed."

           8) After the amendment, the new Section 4 reads as
 B    under:

          "4. Valuation of excisable goods for purposes
          of charging of duty of excise. - (1) Where und~r
          this Act, the duty of excise is chargeable on any
c         excisable goods with reference to their value, on
          each removal of the goods, such value shall:.

          (a) in a case where the goods are sold by the
          assessee, for delivery at the time and place of the
          removal, the assessee and the buyer of the goods
D
          are not related and the price is the sold
          consideration for the sale, be the transaction value;

           (b) in any other case, including the case where the
           goods are not sold, be the value determined in such
 E         manner as may be prescribed.

          Explanation. - For ti,- removal of doubts, it is
          hereby declared that the price-cum-duty of the
          excisable goods sold by the assessee shall be the
 F        price actually paid to him for the goods sold and
          the money value of the additional consideration, if
          any, flowing directly or indirectly from the buyer to
          the assessee in connection with the sale of such
          goods, and such price-cum-duty, excluding sales
G         tax and other taxes, if any, actually paid, shall be
          deemed to include the duty payable on such goods.

                    xx             xx             xx
 H         (3) For the purposes of this sei:tion, -
 COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S. 933
           EMCO LTD. [A. K. SIKRI, J.]

              xx             xx              xx                   A

     (c) "place of removal" means -

     (i) a factory or any other place or premises of
     production or manufacture of the excisable goods;
                                                                  B
     (ii) a warehouse or any other place on premises
     wherein the excisable gods have been permitted
     to be deposited without payment of duty;

     (iii) a depot, premises of a consignment agent or            C
     any other place or premises from where the
     excisable goods are to be sold after their clearance
     from the factory;

     from where such goods are removed;                           o
              xx             xx              xx
 -· (d) "transaction value" means the price actually paid
     or payable for the goods, when sold, and includes
     in addition to the amount charged as price, any              E
     amount that th~ buyer is liable to pay to, or on behalf
     of, the assessee, by reason of, or in connection with
     the sale, whether payable at the time of the sale or
     at any other time, including, but not limited to, any
                                                                  F
     amount charged for, or to make provision for,
     advertising or publicity, marketing and selling
     organization expenses, storage, outward handling,
     servicing, warranty, commission or any other matter;
     but does not include the amount of duty of excise,
                                                                  G
     sales tax and other taxes, if any, actually paid or
     actually payable on such goods."

     9. It follows from the above that whereas under old
Section 4, the basis of value was the normal price at which the   H
934          SUPREME COURT REPORTS                       [2015] 9 S.C.R.


A goods were ordinarily sold in the course of wholesale trade,
  under the new provision, the basis of the valuation is the
  transaction value for each removal. Under the new provision,
  the duty is chargeable on the excisable goods with reference
  to their value. Further, such a duty is to be paid on each removal
B of the goods. Th us, the value is to be calculated at the time of
  removal of th.e goods and it has to be on the value of the goods.
  Further, this value has to be 'transaction value'. Both the
  expressions, namely, 'place of removal' as well as 'transaction
  value', are defined under this very Section. These definitions
C are contained in sub-section 3(c) and 3(d) respectively of
  Section 4, as already reproduced above.

            10. It is significant to point out that the definition of 'place
      of removal' virtually remains the same, except that clause (3)
 D    was inserted in the year 2003. The issue as to whether the
      cost of freight and transit insurance is to be included or not
      depends upon the place of removal.                                   _

         11. 'Place of removal' is the place or premises from where
 E the excisable goods are to be sold after their clearance from
   the factory and from where such goods are removed. Thus,
   'place of removal', in a given case becomes a crucial
   determinative factor for the purpose of valuation. In the present
   context, if it is found that transportation charges and transit
 F insurance charges were incurred after the 'place of removal',
   then they are not to be included. On the other hand, if these
   charges are incurred before the 'place of removal' then they
   are to be included while arriving at the transaction value. Again,
   in the context of the present case, what is to be determined is
 G as to whether the 'place of removal' was the factory gate of the
   respondent or it was the premises of the purchaser at the time
   of delivery of these goods.

        12. If the goods are cleared atthe factory gate, then the
 H excise duty has to be charged on the va:uation of the goods to
  COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S. 935
            EMCO LTD. [A. K. SIKRI, J.]

  be arrived at the factory gate as that would be the place of A .
  removal of goods. It would mean that the expenses which are
  incurred after the removal of goods from the factory gate namely
  freight, insurance and unloading charges etc. are not to be
  included in the valuation of the goods for the purposes of excise
  duty. The reason is that the sale of goods to the buyer is at the B
  factory gate when the property passes to the buyer and the
  aforesaid expenditure are thereafter incurred by the buyer. It
. is this aspect which was gone into by this Court in the case of
  Escorts JCB Ltd. (supra). That was a case where question ·
  of including insurance charges came up for consideration. It C
  was found as a fact that the goods were cleared at the factory
  gate. On these facts, this Court held that insurance charges,
  or for that matter, transport charges would not be included even
  if the assessee had arranged for the transit insurance. The
                                                                    0
  Court found that the terms and conditions of sale clearly
  stipulated that it was ex-works at the factory gate of the
  assessee. The payment was to be made before discharge of
  the goods from the factory premises. In the opinion of the Court,
  the machinery which was handed over to the career/transporter E
  on receiving the payment was as good as delivery to the buyer
  in terms of Section 39 of the Sale of Goods Act and, therefore,
  possession of the sold goods was handed over to the buyer at
 the factory gate. In this manner, the transaction was full and
  complete and nothing remained to be done after the goods F
  left the factory premises. On these facts, provisions of Section
 4 of the Act, which deals with valuation of excisable goods for
 the purposes of charging of duty of excise was taken note of
  and analysed, holding that the aforesaid charges could not be
  included for the purpose of arriving at valuation of excisable G
  goods. The Court found fault with the orders passed by the
  authorities as well as CEGAT in the following manner:

      "A perusal of the orders passed by the authorities
      and the CEGAT show that since transit insurance           H
936   SUPREME COURT REPORTS                     [2015] 9 S.C.R.


.A    was arranged by the assessee, therefore it was
      inferred and held that the ownership of the goods
      was retained by the assessee until it was delivered
      to the buyer on the reasoning that otherwise there
      would be no occasion for the seller namely, the
 B    assessee to take risk of any kind of damage to the
      goods during transportation. To us, the whole
      reasoning seems to be untenable. The two aspects
      have been mixed up - one relating to the transaction
      of sale of the goods and the other arranging for the
 c    transit insurance forthe buyer and charging the
      amount expended for the purpose from him
      separately. In connection with the proposition that
      insurance can be taken by a third person on behalf
      of another, reliance has been placed by the
 D
      assessee on "Chitty on Contracts" Twenty-
      Eight Edition Vol. 2 Special Contracts P.978
      Chap. 41 Note 007 under the heading
      "Insurance of Another's interest". It is indicated
 E    that in varied facts and circumstances and subject
      to the statutory provisions of contract, it is possible
      to ensure the interest of another. Referring to a
      decision reported in [19471 K.B. 685 Prudential
      Staff Union versus Hall, it is observed that a seller
 F    in possession of the goods when the property and
      risks have passed may insure his buyer's interest.
      Referring to a decision reported in Hepburn
      versus A. Tomlinson (Hauliers) Ltd. H.L. (E)
      1966 451, it has been submitted on behalf of the
 G    assessee that a bailee apart from its interest may
      also insure the interest of the owner of the property.
      There may be floating insurance policy covering not
      only the limited interest but the whole interest of the
      ownership of the customers in the normal course.
 H
COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S. · 937
          EMCO LTD. [A. K. SIKRI, J.]

          To substantiate the point further, a reference    · A
   to Para 5-012 at Page 184 of Benjamin's Sale
   of Goo.ds Fourth Edition has been made which
   is to the following effect:

   "Insurance. The passing of prop~rty is rarely of          B
   relevance to insurance. A person can insure goods
   to their full value against any loss on behalf of
   anyone who may be entitled to an interest in the
   goods at the time the loss occurs, provided that it
   appears from the terms of the policy that it was          C
   intended to cover their interest. Also a buyer will
   have an insurable interest in goods if they are at
   his risk, whether or not the property has passed to
   him".
                                                             D
         From the above passage it is clear that
   ownership in the property may not have any
   relevance in so far insurance of goods sold during
   transit is concerned. It would therefore not be lawful
   to draw an inference of retention of ownership in          E
   the property sold by the seller merely by reason of
   the fact that the seller had insured such goods during
   transit to buyer. It is not necessary that insurance
   of the goods and the ownership of the property
   insured must always go together. It may be                 F
   depending upon various facts and circumstances
   of a particular transaction and terms and conditions
   of sale. A reference has also been made to
   Colinvauz's Law of Insurance, Sixth Edition by
   Robert Merkin. to indicate that there may be              G
   insurance to cover the interest of others that is to
   say not necessarily the person insuring the interest
   must be the owner of the property.
                                                              H
938   SUPREME COURT REPORTS                    [2015] 9 S.C.R.


A          In one of the cases referred to and reported
      in 1983 E.L.T. 1896 (S.C.) Union of India and
      others etc. etc. :versus Bombay Tyre
      International Ltd. etc. etc. the question involved
      was regarding deduction of transportation charges
B     along with cost of insurance. It was held as follows:

      "Therefore, the expenses incurred on account of the
      several factors which have contributed to its value .
      upto the date of sale, which apparently y-.tould ~e
c     the date of delivery, are liable to be included.
      Consequently, where the sale is effected at the
      factory gate, expenses incurred by the assessee
      upto the date of delivery on account of storage
      charges, outward handling charges, interest on
D     inventories (stocks carried by the manufacturer
      after clearance), charges for other services after
      delivery to the buyer, namely after-sales service and
      marketing and selling organization expenses
      including advertisement expenses cannot .be
E     deducted. It will be noted that advertisement
      expenses, marketing and selling organization
      expenses and after sale service promote the
      marketability of the article and enter into its value
      in the trade. Where the sale in the course of
 F
      wholesale trade is effected by the assessee through
      its sales organisation at a place or places outside
      the factory gate, the expenses incurred by the
      assessee upto the date of delivery under the
 G    aforesaid heads cannot on the same grounds be
      deducted. But the assessee will be entitled to a
      deduction on account of the cost of transportation
      of the excisable article from the factory gate to the
      place or places where it is sold. The cost of
 H    transportation will include the cost of insurance on
 COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S. 939
           EMCO LTD. [A. K. SIKRI, J.]

         the freight for transportation of the goods from the        A
         factory gate to the place or places of delivery''.

       13. We 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                 B
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, Naida v. Accurate Meters
Ltd. 2, the Court took note offew more decisions, including the
case of Escorts JCB Ltd., and reiterated the aforesaid               C
principles but at the same time also emphasising 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. Mis. Roofit D
Industries Ltd. 3 , 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       E
        . 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           F
          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           G
          goods stands transferred to the buyer, any
          expenditure incurred thereafter has to be on buyer's
          account and cannot be a component which would
 2
     (2009) s sec 52
 3
     (2015) 5 SCALE 470                                              H
940         SUPREME COURT REPORTS                    [2015] 9 S.C.R.


A          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."

s           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
 C    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
 o    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
 E    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
 F    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. Em co till the delivery of the said goods to the customer's
      premises and, therefore, freight incurred and transit insurance
 G    charges were recovered from the customers ..... .for covering
      the transit risk they had taken out trans!t insurance policy and
      whenever there was a loss or damage to goods Mis. Emco
      claims the same from the insurance company..... the
 H    possession of the goods is transferred only at the premises of
 COMMISSIONER CENTRAL EXCISE, MUMBAI-Ill v. M/S. 941
           EMCO LTD. [A. K. SIKRI, J.)

the buyers/customers". The Commissioner also noted that the       A
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-    B
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           c
     insurance recovered by them but the same
     suppressed from the department as it appears from
     page 1OG the show cause notice.

     2. It was confirmed after hearing both sides, it is
                                                                  D
     found that the issue is well settled in favouring the
     assessee by the decision in the case of Associatad
     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             E
     [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 F
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 G
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 H
942          SUPREME COURT REPORTS                 [2015] 9 S.C.R.


A  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
 B eachcase.

          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
 C 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
 D of delivery at the buyer's 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.

 E         20. Accordingly, the appeals are allowed in the aforesaid
      terms by remitting the cases to the Tribunal for fresh
      consideration.

              No costs.
 F
      Kalpana K. Tripathy                             Appeals allowed.