2018 (7) TMI 1519 - AT - Central Excise

Valuation - turnkey projects - inclusion of value of the accessories in assessable value - whether the valuation of the transformer adopted by the appellant basing reliance on chartered accountant certificate, cleared to self for executing HVDs works under turnkey project is correct or otherwise, as there were price schedules in the agreement with APSPDCL? - whether the cost of accessories under dispute to be included to the price of transformers or otherwise? Held that - It can be seen from the invoice and the Chartered Accountant Certificate, appellant had discharge the Central Excise duty at the higher assessable value then as certified by the Chartered Accountant - The discharged duty liability by the appellant on specimen invoice reproduced above seems to be inconsonance with the law. It is undisputed the transformers were used for erection at the project site deeming it as self consumption. The Tribunal in the case of Blue Star Ltd., 2016 (12) TMI 1518 - CESTAT MUMBAI has come to a conclusion, which goods cleared on self basis to the site of the customer, valuation done should be in accordance with the provisions of Section 4(1)(b) of the Central Excise Act, 1944. The demand for the differential duty from the appellant is unsustainable and liable to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Valuation of transformers for Central Excise duty - Correctness of valuation based on chartered accountant certificate - Inclusion of cost of accessories in the price of transformers.

Analysis:
The appeal challenged an order regarding the valuation of transformers for Central Excise duty in a contract with a power distribution company. The appellant contended that the valuation based on a chartered accountant certificate was correct, citing precedents and a certificate submitted. The First Appellate Authority disagreed, emphasizing the need to include the cost of accessories in the transformer price. The main issue was whether the appellant's valuation method was valid and if accessory costs should be added.

The appellant argued that the chartered accountant certificate determined the correct assessable value of the transformers. The Tribunal reviewed the CAS-4 certificate and invoices, finding that the duty was discharged at a higher value than certified. Citing previous cases, the Tribunal noted that the duty liability should be based on the CAS-4 certificate. The appellant's self-consumption of the transformers for a turnkey project was acknowledged.

The Tribunal referenced a case involving a similar situation, where the valuation was determined under Section 4(1)(b) of the Central Excise Act. It was noted that the valuation method should adhere to Rule 8 without adding extra elements beyond the cost of manufacture. The Tribunal concluded that the demand for differential duty was unsustainable, setting aside the impugned order and allowing the appeal with consequential reliefs.

In summary, the Tribunal upheld the appellant's valuation based on the chartered accountant certificate, emphasizing compliance with statutory provisions and previous rulings. The inclusion of accessory costs in the transformer price was deemed unnecessary, leading to the appeal being allowed with consequential reliefs.