2000 (7) TMI 188 - AT - Central Excise

Summary

Issues:
- Inclusion of 'designing and engineering charges' in assessable value
- Validity of penalties imposed under Rule 209A
- Allegations of suppression of facts and limitation
- Interpretation of contract terms regarding engineering and designing charges

Inclusion of 'designing and engineering charges' in assessable value:
The appellants argued that charges related to soil investigation, system engineering, civil designing, and sourcing of equipment were not part of manufacturing or marketability, thus should not be included in assessable value. They relied on a previous order by the Commissioner and a Tribunal decision to support their case. The Department contended that these charges should be included as they were part of a turnkey project involving manufacture, supply, and erection of machinery. The Tribunal found that some charges related to civil construction, but others were part of manufacturing and designing activities. The duty demand was remanded for a reevaluation based on the breakdown of charges.

Validity of penalties imposed under Rule 209A:
The appellants argued that penalties imposed were not valid as there was no mens rea or guilty mind shown by the Department. The Department claimed that the appellants willfully suppressed facts and incorrectly cited invoice values. The Tribunal found that penalties were not justified without evidence of mens rea and ordered a reevaluation of the duty demand.

Allegations of suppression of facts and limitation:
The appellants argued that there was no suppression of facts as goods were cleared at approved rates and as an SSI unit, they were exempt from certain obligations. The Department alleged suppression based on audit reports. The Tribunal found that the allegations of suppression were not sustainable without evidence of non-compliance with legal obligations.

Interpretation of contract terms regarding engineering and designing charges:
The contract between the parties mentioned engineering and designing charges for specific equipment. The Tribunal analyzed the contract terms and found that some charges related to civil construction, while others were part of manufacturing and designing activities. The duty demand was remanded for a detailed assessment based on the contract terms.

In conclusion, the Tribunal remanded the case for a reevaluation of the duty demand and penalties, considering the breakdown of charges and contract terms. The appellants were granted the opportunity to be heard in the fresh proceedings, and the appeals were allowed by way of remand.