2016 (7) TMI 1169 - AT - Central Excise

Assessable value of the sleepers - inclusion of inspection charges collected from the Railways and paid to RITES -Held that - We find that the issue is no more res integra and settled by the Larger Bench of the Tribunal in the case of Commissioner of Central Excise Vs. Bhaskar Ispat Pvt. Ltd. (2004 (3) TMI 102 - CESTAT, NEW DELHI ). It stands concluded in the said decision that the inspection charges paid to Rites on behalf of the Railways are not includible in the assessable value.

Summary

Issues:
Whether inspection charges collected from Railways and paid to RITES should be added to the assessable value of final products.

Analysis:
The central issue in this case was whether the inspection charges collected by the appellant from Railways and subsequently paid to RITES for inspecting Railways' sleepers should be included in the assessable value of the final products. The Tribunal referred to a previous decision in the case of Commissioner of Central Excise Vs. Bhaskar Ispat Pvt. Ltd., where it was held that such inspection charges are not to be included in the assessable value. This precedent was crucial in determining the outcome of the present appeal.

The Revenue, represented by the ld. DR, cited a Supreme Court decision in the case of CCE, Tamil Nadu Vs. Southern Structurals Pvt. Ltd., which stated that inspection charges per wagon collected by an assessee should be part of the assessable value. However, the Tribunal distinguished this case by highlighting that the appellant in the current case was transparently passing on the collected amount to RITES without retaining any portion for themselves, unlike the situation in the Southern Structurals Pvt. Ltd. case.

By applying the ratio of the Larger Bench decision in the Bhaskar Ispat Pvt. Ltd. case, the Tribunal concluded that the inspection charges collected from Railways and paid to RITES should not be considered as part of the assessable value of the sleepers. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief. The decision was made after careful consideration of the legal precedents and the specific circumstances of the case.

In summary, the judgment clarified the treatment of inspection charges in the assessable value of products, emphasizing the importance of previous decisions and the specific details of the transactions involved. The Tribunal's decision was based on a thorough analysis of the legal principles and factual aspects presented during the appeal proceedings.