2019 (1) TMI 1095 - AT - Central Excise

Valuation - inclusion of charges for installation, erection, commissioning, supervising at site and training of customers employees in assessable value of finished goods - Held that - The CESTAT, New Delhi in ROCKWELL AUTOMATION INDIA PVT. LTD. VERSUS COMMR. OF C. EX., GHAZIABAD 2008 (5) TMI 62 - CESTAT NEW DELHI allowed the appeal of the appellant by holding that the impugned charges on account of installation etc. are clearly post removal expenses, having no nexus with manufacturing/marketing of the goods and hence not includible in A.V. - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues Involved: Determination of whether charges for installation, erection, commissioning, supervising at site, and training of customers' employees are liable to be included in the transaction value of the finished goods.

Analysis:
The appeal in question arises from an Order-in-Appeal passed by the Commissioner (Appeals), Ghaziabad, regarding the inclusion of charges for installation, erection, commissioning, supervising at site, and training of customers' employees in the transaction value of Integrated Control Automation Monitoring System (ICAM) manufactured by M/s Rockwell Automation India Pvt. Ltd. The appellant sometimes provides these additional services to customers along with the sale of ICAM systems. The dispute revolves around whether these charges should be part of the transaction value of the finished goods. The show cause notice issued to the appellant proposed a duty demand for not including these charges in the transaction value. The Order-in-Original confirmed the duty demand, which was subsequently upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

The appellant argued that the issue at hand is covered by a previous judgment of the Tribunal in the matter of Rockwell Automation India Pvt. Ltd. vs. CCE, Ghaziabad. The Revenue, on the other hand, relied on the impugned order. The Tribunal examined the show cause notice, which highlighted past instances where similar issues were raised against the appellant. Notably, a previous Order-in-Appeal dated 25/11/2005 was challenged by the appellant before the CESTAT, New Delhi, and the appeal was allowed, setting aside the earlier order. The Tribunal in that case emphasized that the charges for optional post-removal services like erection, installation, commissioning, supervision, and training are not includible in the assessable value. This decision was based on the premise that these services are not directly related to the manufacturing or marketing of the goods.

Given the precedent set by the previous judgment in the appellant's own case, the Tribunal set aside the impugned order and allowed the appeal. The Tribunal found that the charges for installation, erection, commissioning, supervision, and training, being optional services with no direct nexus to the manufacturing or marketing of the goods, should not be included in the assessable value. Consequently, the appellant was granted consequential relief as per the law.