2018 (5) TMI 1196 - AT - Central Excise

Demand of duty - installation and commissioning charges of machines - machines were permanently embedded to earth - Held that - the identical issue has come up before the Tribunal in the case of Autopack Machines Pvt. Ltd. vs. CCE, Thane-I 2016 (12) TMI 653 - CESTAT MUMBAI , where it was held that goods cleared at the factory gate, assessable value will not include payment made for any activities thereafter - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal dismissed for default recalled and restored
- Duty demanded on installation and commissioning charges
- Interpretation of Section 4 of the Central Excise Act
- Applicability of previous Tribunal and Supreme Court judgments

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Mr. Justice (Dr.) Satish Chandra and Mr. V. Padmanabhan, involved the recall and restoration of an appeal that was initially dismissed for default. The appeal was admitted and heard on merits with the consent of both parties. The case revolved around the demand for duty on installation and commissioning charges by the department. The appellants, manufacturers of specific machines falling under Chapter 84 sub-heading 8464 of the Central Excise Tariff Act, had dismantled the machines after paying Central Excise duty and reassembled them at the buyer's site. The department contended that duty was also applicable on the installation and commissioning charges.

Upon considering the arguments and perusing the record, the Tribunal referred to previous judgments, including Autopack Machines Pvt. Ltd. vs. CCE, Thane-I and CCE, Mumbai vs. Official Liquidator Brimco Plastic Mach. P. Ltd. The Tribunal noted that as per Section 4 of the Central Excise Act, the transaction value is determined at the time of clearance of goods at the factory gate. Any expenses incurred post-clearance, particularly after the supply of equipment, such as installation charges, should not be considered for duty calculation. Citing the previous judgments, the Tribunal dismissed the appeal, stating that the expenses post-clearance could not be factored in. Consequently, the impugned order demanding duty on installation and commissioning charges was set aside, and the appeal filed by the appellant was allowed.