Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise And ... vs Indian Hume Pipe Co. Ltd. on 5 September, 2001
JUDGMENT
Jyoti Balasundaram, Member(J)
1. The respondent herein are engaged in the manufacture of P.S.C. Pipes and articles of cement falling under Chapter 68.07 of the Schedule to the Central Excise Tariff Act, 1985. Verification of records by the Central Excise officers showed that the assessee had not included the inspection charges in the assessable value of the pipes. It was also found that inspection charges were paid to M/s. Engineers India Ltd by M/s. Indian Hume Pipe Co.Ltd. and subsequently the same were reimbursed to them by M/s. Gujarat Water Supply and Sewerage Board who were the buyers of the pipes manufactured by the respondents. A show cause notice proposing recovery of duty of approximately Rs.80,000/- as a result of non inclusion of inspection charges in the assessable value, was issued. The Commissioner adjudicated the notice and dropped the demand on the ground that the inspection charges already included in the assessable value before the goods attained the stage of marketability. Hence, this appeal by the Revenue.
2. We have heard the departmental representative and perused the records.
3. We find that the Manager of the respondent company stated that the company was carrying out the inspection and testing of P.S.C. Pipes and the cost of which was included in the assessable value and as regards the inspection charges paid to M/s. Engineering India Ltd., such inspection was over and above the inspection already carried out by the respondents. W also find that this submission has not been controverted by the Revenue and the Commissioner has gone in detail into the terms of the Tender agreements and found that the inspection charges in question are special inspection charges made after the goods had already become marketable and that the special inspection was carried out at the request of the customers. It has been held by the Tribunal in the case of Escorts Ltd vs. CCE,New Delhi [1999(107)E.L.T.48 that inspection charges for further inspection that is for inspection after the goods have attained the stage of marketability carried out by other company on behalf of customer is not to be included in the assessable value of the goods. The same view has been taken in the case of Pratolina Instruments Private Ltd. vs CCE, Mumbai [1999(114)E.L.T. 725]. Following the ratio of the above decisions, we hold that the Commissioner has rightly held that special inspection charges are not includable in the assessable value, uphold the impugned order and reject the appeal of the Revenue.
(Dictated in Court)