2016 (2) TMI 760 - AT - Central Excise

Assessable value - Revenue has sought to add the test charges so recovered in respect of the cylinders in the assessable value of the gases supplied by the appellant - Held that - As regards the inclusion in the assessable value of the cylinder rental and maintenance charges in the case where the gases were supplied in the appellant s own cylinders and the charges for cylinder testing done at the request of the customers, in the cases where the gases were supplied in the cylinders brought by the customers, it is not disputed that the gases, in question, were marketable as such inasmuch as a substantial quantity of the gases was being supplied in tankers as well as through pipe line and also in the cylinders brought by the customers and as such, the packing of the gases into cylinders is not necessary for making the gas marketable. In view of this factual matrix, the ratio of the Tribunal s decision in the case of CCE v. Grasim Industries Ltd., 2014 (4) TMI 650 - CESTAT NEW DELHI would be applicable to this case and these charges would not be includible in the assessable value. Also see case of Punjab Alkalis & Chemicals Ltd 2004 (3) TMI 489 - CESTAT, NEW DELHI and Goyal M.G. Gases Pvt. Ltd. 2014 (8) TMI 657 - CESTAT NEW DELHI - Decided against revenue

Summary

Issues Involved:
1. Inclusion of test charges in the assessable value of gases supplied by the appellant.

Analysis:
The case involved a dispute regarding the inclusion of test charges in the assessable value of gases supplied by the appellant. The respondents, a manufacturer and supplier of gases, received cylinders from customers, filled them with gases, and sold them back. The Revenue sought to add the test charges recovered for the cylinders in the assessable value of the gases supplied. The Addl. Commissioner confirmed the demand, but the Commissioner (Appeals) set it aside, relying on a Tribunal order upheld by the Supreme Court. The Revenue appealed to the Tribunal.

The Revenue contended that the cost of cylinders, being durable and returnable, should not be included in the assessable value, but the cost of inspection should be included to make the gas marketable. The respondent's counsel argued that the matter was settled by the Supreme Court in a previous case and cited relevant Tribunal decisions where charges for testing were not included in the assessable value as they were done at the request of buyers.

The Tribunal examined the submissions and found the case of the respondent to be covered by previous Tribunal decisions. It cited a case where charges for cylinder testing done at the request of customers were not includible in the assessable value as the gases were marketable without being packed into cylinders. Another Tribunal decision highlighted that testing charges for durable and returnable containers were not to be added to the assessable value. The Tribunal dismissed the Revenue's appeal based on these precedents.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision and dismissed the Revenue's appeal, stating that the testing charges for cylinders were not to be included in the assessable value of the gases supplied by the appellant.