2003 (12) TMI 231 - AT - Central Excise

Summary

Issues:
Inclusion of charges for drawings and documents in the assessable value of goods supplied by the assessee.

Analysis:
The case involved a dispute regarding the includibility of charges for drawings and documents in the assessable value of goods supplied by the assessee. The Commissioner (Appeals) upheld the Additional Commissioner's finding that these charges should be included in the value of the goods, leading to duty payment and penalties imposed on the assessee and its employees.

The Tribunal considered three orders placed by the buyer with the assessee, focusing on the "work order for drawings and documents" for a caustic evaporation plant. The Commissioner's view was that these drawings and documents were essential for the manufacture of the plant at the customer's site, thus forming part of the assessable value. Reference was made to a previous Tribunal decision regarding the inclusion of designing charges connected with tailor-made items in the assessable value.

The Tribunal disagreed with the department's representative, emphasizing that charges for erection and fabrication are generally not includible once the plant is erected and becomes immovable property. The assessable value pertains to goods cleared from the factory before becoming part of immovable property, including costs incurred up to that stage. The Tribunal highlighted the specific drawings and documents listed in the contract, asserting that they were related to the plant as it existed at the site.

The Tribunal identified exceptions in the contract, such as equipment fabrication drawings, requiring further examination to determine their relation to the plant's manufacture. Discrepancies in items like piping material specification raised questions about whether certain costs were for fabrication or purchase. Precedents were cited, with a distinction made between designing charges related to goods removed from the factory and those that should not be included in the assessable value.

The Tribunal directed the adjudicating authority to consider all relevant material and submissions to decide on the inclusion of the disputed charges in the assessable value, along with assessing eligibility for exemptions under specific notifications. Ultimately, the appeals were allowed, setting aside the impugned order and requiring a reevaluation of the disputed charges' inclusion in the assessable value.