Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of C. Ex. vs Kirloskar Electric Co. Ltd. on 13 August, 2004
Equivalent citations: 2005(182)ELT334(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. The Revenue has challenged the findings recorded by Commissioner (Appeals) in Para 7, which is noted herein below :-
"7. My findings in this regard are as follows :-
(i) the decision to include the above-mentioned charges in the assessable value relates to the labour contract consisting of preparation of the site layout plans and drawing, preparation of instructions and operating manuals, supervision of erection and commissioning, providing software support etc. These components were described by the term 'System Engineering charges'.
(ii) The relevant work Order and the scope work relating to systems engineering indicate that the charges in question were essentially related to installation, training, etc at site and have no relation to manufacture of the goods manufactured/supplied by the appellants. These charges reflect basically labour element and are in the nature of post-removal expenses.
(iii) The decision of the Tribunal viz. CCE, Pune v. Thermax Pvt. Ltd. [1994 (70) E.L.T. 247 (T)] relied upon by the original authority has now been set aside by the judgment of the Hon'ble Supreme Court vide 1998 (99) E.L.T. 481 (S.C.).
(iv) The Order-in-original is not sustainable on merits. The imposition of penalty is also not justified.
8. In view of the above, I set aside the Order-in-original and allow the appeal fully with consequential relief."
2. Ld. SDR submits that in terms of the Apex Court judgment rendered in the case of Thermax Limited v. CCE [1998 (99) E.L.T. 481 (S.C.)] the Counsel appearing for the appellant therein had conceded that the drawing and designing charges are required to be added in the assessable value. It is his contention that that charges recovered by the assessee were drawing and designing charges and hence the Order is not proper and legal. He submits that design and engineering charges are required to be assessable value and relies on the judgment rendered in the case of Naveen Industrial Projects (P) Ltd. v. CCE, Meerut [2001 (137) E.L.T. 385(Tri.-Del.)].
3. Ld. Representative for the assessee points out that the charges were not drawing and engineering charges pertaining to the setting up of the industry but as noted by the Commissioner in Para 7 which relates to labour contract consisting of preparation of the site layout plans and has nothing to do with the manufacture of the goods. He submits that on facts the judgments relied by the SDR is distinguishable.
4. On a careful consideration and perusal of the Commissioner's Order as extracted, we notice that the Commissioner has examined the relevant work Order and the scope work relating to Systems Engineering and has clearly noted that they were essentially related to installation, training, etc. at site and have no relation to manufacture of goods manufactured/supplied by the appellant and it basically reflects labour element and are in the nature of post-removal expenses. These facts are not disputed and the Revenue is only stating that the design and engineering charges are required to be added. There is no dispute on the element of design and engineering charges which are required to be added in the assessable value but the Commissioner (Appeals) has noted from the facts of the case that they are not in the nature of design and engineering charges. Therefore, we find that the Order of the Commissioner (Appeals) is based on appreciation of facts and the judgments are distinguishable. There is no merit in the appeal and the same is rejected.