2016 (10) TMI 303 - AT - Central Excise

Valuation - suppression of assessable value - demand of excise duty on suppressed amount - separate billing for the installation of the FRP bodies - FRP cleared on payment of duty - whether there was any difference between the assessable value of FRP bodies cleared by the appellant to vehicle manufacturer and the assessable value of the FRP bodies which are installed in the factory premises? - Held that - no difference found in the assessable value. In the absence of any depression in the assessable value of the FRP bodies installed in the factory premises as against the FRP bodies sold, demand of central excise duty on the installation charges received by the appellant not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Undervaluation of goods for central excise duty due to separate billing for installation charges.

Analysis:
The appeal was against an Order-in-Appeal that held the appellant undervalued goods by billing separately for installation of FRP bodies on which central excise duty was paid. The revenue alleged that the installation charges were an additional amount in disguise, suppressing the assessable value. The appellant argued that they are manufacturers of FRP bodies and also undertook installation at the customer's option. They claimed the installation charges were post-manufacturing expenses not included in the assessable value, citing legal precedents. The Departmental Representative supported the lower authorities' findings, stating the installation charges were a significant portion of the assessable value.

Upon review, the Tribunal found the appellant installed FRP bodies on vehicles at their premises on customer request, and the charges were only for installation done at their factory. It was noted that the FRP bodies cleared from the factory premises had appropriate central excise duty paid. Both sides confirmed no difference in assessable value between FRP bodies sold and those installed. As there was no evidence of undervaluation, the revenue had no basis to demand central excise duty on installation charges. The Tribunal agreed with the legal position cited by the appellant, referencing the decisions in Indian Oxygen and Baroda Electric Meters. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the absence of assessable value discrepancies and the applicability of legal precedents in determining the central excise duty liability on installation charges.