Custom, Excise & Service Tax Tribunal
M/S. Annapurna Malleables Pvt. Ltd vs Cce, Raipur on 22 December, 2015
THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision:22.12.2015
Excise Appeals Nos.E/502 and 515/2007-EX(DB)
[Arising out of Order-in-Appeal No.203/RPR-I/2006 dated 23.11.2006 in appeal No.E/502/2007 and Order-in-Appeal No.202/RPR-I/2006 dated 23.11.2006 in Appeal No.E/515/2007, passed by the Commissioner of Customs & Central Excise (Appeals-I), Raipur (C.G.)].
M/s. Annapurna Malleables Pvt. Ltd. Appellants
Vs.
CCE, Raipur Respondent
Appearance:
Rep. by Shri L.P. Asthana, Advocate for the appellant. Rep. by Shri R.K. Mishra, DR for the respondent. For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities?
Coram: Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Orders Nos. dated:22.12.2015 Per Ashok Jindal:
The appellant has filed these appeals against the impugned orders on the charge of under-valuation.
2. The facts of the case are that the appellant is engaged in the manufacture of Iron and steel castings and parts of railways. The appellant is clearing these goods to the independent buyers as well as to the Railways. These goods are tested by RITES and the cost of inspection charges at the time of inspection by RITES are also included in the assessable value of the goods but the goods cleared to Railways were again tested by RDSO and the cost of the Special/Additional Inspection done by RDSO, which was borne by the Railways, has not been included in the assessable value. Therefore, the impugned proceedings were initiated against the appellant and demand of duty on account of under-valuation has been confirmed. Aggrieved from the said order, the appellant is before us.
3. Ld. Counsel for the appellant submits that as the inspection done by RDSO, on the request of the Railways and that is the pre-condition of the goods to be sold to the Railways, in that circumstances, the testing charges are not to be included in the assessable value as without inspection, their goods are saleable in the open market. Therefore expenses reimbursed by the Railways towards testing charges by RDSO are not includible in the assessable value. To support this contention, he relies on the decisions of the Tribunal in the case of Hindustan Development Corporation Ltd. Vs. CCE, Calcutta reported in 1996 (85) ELT 58 (Tribunal), which has been affirmed by the decision of the Honble Apex Court in the case of Hindustan Development Corporation Ltd. reported in 1996 (86) ELT A-162 (SC), in the case of Shree Pipes Ltd. Vs. CCE reported in 1992 (59) ELT 462 (Tribunal) and M/s. TVS Motors Company Ltd. reported in 2015 TIOL-299-SC-CX.
4. On the other hand, ld. AR controverted the argument advanced by the ld. Counsel and submits in defence to the allegation advanced by the appellant that the appellant themselves have contended that their goods are saleable on their internal inspection and they have paid duty on the testing charges paid to the RITES, therefore, the same will apply to the inspection done by RDSO and the same is pre-condition to the sale of the goods. In that circumstances, they are required to be added in the assessable value. To support his contention, he relies on the decisions in the case of Hindustan Gas & Industries Ltd. Vs. CCE, Baroda reported in 2001 (133) ELT 481 (Tribunal-Mumbai), Commissioner of Central Excise, Raipur Vs. Surya Alloys Industries (P) Ltd. reported in 2015 (316) ELT 104 (Tribunal-Delhi) and Commissioner of Central Excise, Tamil Nadu Vs. Southern Structurals Ltd. reported in 2008 (229) ELT 487 (SC).
5. Heard the parties.
6. Perused the records.
7. On perusal of the records, we find that the appellant has taken a defence in their reply to the show cause notice that their goods are marketable on their internal inspection but the goods were tested by RITES and the testing charges paid to the RITES were included in the assessable value and the appellant is not disputing the payment of duty on the testing done by the RITES. Therefore, the same is not the subject matter for us to determine whether the duty is payable by the appellant on the testing charges paid to the RITES. Therefore, the testing charges paid to the RITES are includible in the assessable value.
8. The issue before us is whether RDSO charges, which have been reimbursed by the Railways, are includible in the assessable value or not. Both the sides have produced case laws in defence of their pleadings as discussed hereinabove. The issue is based in the case laws are that if the goods are not sellable without any testing done by the assessee, in that case, the testing charges are includible in the assessable value as after testing/inspection the goods are marketable. But in a case where the testing has been done on a particular request by a buyer and the testing charges has been reimbursed by the buyer, in such cases, the testing charges are not includible in the assessable value as the goods are marketable without testing /inspection done on behalf of the buyer.
9. The adjudicating authority is directed to ascertain from the facts of the case whether the goods are marketable without testing done by RDSO or not? If the goods are marketable without testing done by RDSO, in that case, the testing /inspection charges are not includible in the assessable value. If the goods are not marketable without testing done by RDSO, in that case, the testing/inspection charges are includible in the assessable value. The adjudicating authority shall verify the records and if required, pass an order to demand duty accordingly. With these observations, the appeals are disposed of.
[Operative part of the order pronounced in the open Court] ( Ashok Jindal ) Member (Judicial) ( B. Ravichandran) Member (Technical) Ckp.
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