2006 (3) TMI 522 - AT - Central Excise

Summary

Issues:
1. Whether duty and penalty waiver should be granted based on the contention of the applicant regarding the payment of duty in relation to services provided along with the manufactured system.
2. Whether the Revenue's argument for considering transactional value, including installation charges, for valuation purposes is valid.

Analysis:
1. The applicant sought a waiver of pre-deposit of duty and penalty, arguing that they manufacture and clear an Integrated Control Automation Monitoring System, paying duty on the system, while also providing installation assistance and training services to customers. The Revenue contended that post-amendment, transaction value should include not only the system's price but also installation charges. The applicant relied on the Supreme Court's decision in Thermax Ltd. v. CCE, which held that installation charges are not part of the assessable value of equipment. The Tribunal found merit in the applicant's case, noting the separate invoices for installation services and training provided. Citing the Supreme Court's decision, the Tribunal granted a waiver of duty and penalties, allowing the appeal and stay applications.

2. The Revenue argued that transactional value should encompass both the system price and installation charges post-amendment. However, the Tribunal, considering the separate invoicing for installation services and training, found merit in the applicant's reliance on the Supreme Court's decision in Thermax Ltd. The Tribunal held that the applicants have a strong case based on this precedent, leading to the waiver of the duty and penalties. The Tribunal's decision was influenced by the distinction between the system's price and the additional services provided, aligning with the Supreme Court's interpretation regarding the inclusion of installation charges in the assessable value of equipment.