2015 (2) TMI 654 - AT - Central Excise

Valuation of goods - Whether cylinder rental charges and cylinder repair/ testing charges would be includible in the assessable value of the gases being sold - Held that - Goods are marketable as such without being packed in any special container, as the same can be sold even in the cylinders brought by the customers, following the judgment of this Tribunal in the case of CCE, Indore vs. Grasim Industries Ltd. (2014 (4) TMI 650 - CESTAT NEW DELHI), cylinder rental charges and cylinder testing and repair charges would not be includible in the assessable value of the goods. As regards the Revenue s reliance on the judgment of the Tribunal in the case of Kota Oxygen (P) Ltd. vs. CCE, Jaipur (2000 (8) TMI 316 - CEGAT, NEW DELHI) which has been upheld by the Apex Court, in that case the assessee was charging fixed amount towards rental and cylinder maintenance charges even from the customers who purchased oxygen gas manufactured by the assessee in their own cylinders and there was also allegation that the amounts charged as cylinder rental and cylinder maintenance were several times higher than the actual cost incurred in this regard and on that basis the Revenue had alleged that part of the value of the oxygen gas was being recovered as cylinder rental/maintenance charges and this allegation of the Revenue have been upheld by the Tribunal. In the present case, there is no such allegation. - No merit in appeal - Decided against the Revenue.

Summary

Issues:
Assessable value of industrial gases - Inclusion of cylinder rental charges and repair/testing charges.

Analysis:
The case involved a dispute regarding the inclusion of cylinder rental charges and repair/testing charges in the assessable value of industrial gases sold by the respondent. The respondent manufactured industrial gases like Medical grade oxygen gas and liquid nitrogen, selling them in their own cylinders or in cylinders brought by customers. The Department contended that such charges should be included in the assessable value, leading to a duty demand against the respondent. The Jurisdictional Joint Commissioner confirmed the duty demand, but the Commissioner (Appeals) set aside the order, prompting the Revenue to file an appeal.

During the hearing, the Revenue argued that cylinder rentals should be included based on precedents, including a Tribunal judgment and a Supreme Court order. On the other hand, the respondent's counsel cited cases where cylinder charges were not included in the assessable value, emphasizing that the gases were marketable without special containers. The Tribunal noted that in the present case, unlike the precedent where charges were inflated, there was no such allegation against the respondent. Therefore, the Tribunal concluded that cylinder rental and repair/testing charges should not be included in the assessable value of the gases.

Ultimately, the Tribunal found no merit in the Revenue's appeal and dismissed it based on the analysis that the charges in question should not be included in the assessable value of the industrial gases. This decision was made considering the marketability of the gases without special containers and the absence of allegations similar to the precedent cited by the Revenue.

This detailed analysis of the judgment showcases the key arguments presented by both sides, the application of relevant legal precedents, and the Tribunal's reasoning leading to the dismissal of the Revenue's appeal.