2003 (6) TMI 128 - AT - Central Excise

Summary

Issues:
- Inclusion of inspection charges in the assessable value for Central Excise duty calculation.

Detailed Analysis:
1. Facts of the Case: The appellants manufactured goods for the Indian Railways and cleared them without including inspection charges in the assessable value. The Railways had the goods inspected by a third party, RITES, and the inspection charges were billed to the Railways. The department contended that inspection charges should be part of the assessable value for Central Excise duty calculation.

2. Legal Arguments: The appellants argued that the inspection was at the option of the Railways, the goods were marketable before inspection, and the department was aware of the non-inclusion of inspection charges in the price list approved by them. They cited previous tribunal judgments in their favor and requested a similar decision in this case.

3. Revenue's Defense: The Revenue argued that inspection charges should be included in the assessable value based on a majority view in a specific case. They sought dismissal of the appeals.

4. Decision: The Tribunal considered the issue of whether inspection charges borne by the buyer should be included in the assessable value. They referenced several judgments where it was held that such charges are not includible. The Tribunal noted that in the appellants' own case, a similar appeal was allowed based on the non-inclusion of inspection charges. They distinguished a judgment where inspection charges were collected by the assessee from the buyers, unlike in this case where the Railways paid the charges to the third-party inspector. Therefore, the Tribunal held that the impugned order was not legal and proper, setting it aside and allowing the appeals.

5. Conclusion: The Tribunal ruled in favor of the appellants, stating that inspection charges borne by the buyer and paid to a third-party inspector should not be included in the assessable value for Central Excise duty calculation. They based their decision on previous judgments and the specific circumstances of the case, ultimately allowing the appeals filed by the appellants.