2005 (12) TMI 394 - AT - Central Excise

Summary

Issues:
Valuation of telecommunication equipment supplied; Admissibility of deductions on late supply of goods; Acceptance of the decision in the case of Telephone Cables Ltd. by the department.

Valuation of telecommunication equipment supplied:
The appeal was against the finding on the valuation of telecommunication equipment supplied by the respondent to M/s. BSNL. The Commissioner held that the sale price should constitute the assessable value, following the decision in the case of Telephone Cables Ltd. v. CCE, Chandigarh. The Tribunal noted that the decision in the Telephone Cables Ltd. case had become final after dismissal of the appeal by the Supreme Court. The agreement between the parties involved provisional prices with final prices to be determined based on the Purchase Order prevailing at the time of each supply. The Commissioner's order to finalize assessments based on prices under the relevant Purchase Order was deemed appropriate. It was confirmed that the transaction was not vitiated by any consideration other than commercial, and the assessable value was correctly determined based on transaction values.

Admissibility of deductions on late supply of goods:
Regarding deductions on late supply of goods, it was observed that there were no such deductions as supplies continued over time with provisional prices. Final prices were to be determined as per the Purchase Order at the time of each supply. The Commissioner's decision to finalize assessments based on the relevant Purchase Order prices was upheld. The Tribunal found no error in the assessment order, as the transaction values were correctly considered as the assessable value. It was emphasized that the transaction was purely commercial without any other considerations affecting its validity.

Acceptance of the decision in the case of Telephone Cables Ltd. by the department:
The department had not accepted the decision in the case of Telephone Cables Ltd. However, the Tribunal noted that the decision had attained finality after the Supreme Court dismissed the appeal against it. As a result, the Tribunal upheld the decision made in the Telephone Cables Ltd. case and applied it to the current appeal. The department's non-acceptance of the earlier decision did not impact the validity of the decision in the present case, which was based on established legal principles and commercial considerations.

In conclusion, the Tribunal rejected the Revenue's appeal as it found no merit in challenging the valuation of the telecommunication equipment supplied, the admissibility of deductions on late supply of goods, or the acceptance of the decision in the Telephone Cables Ltd. case. The Tribunal affirmed the Commissioner's assessment order, emphasizing the correctness of determining the assessable value based on transaction values and commercial considerations.