2003 (12) TMI 233 - AT - Central Excise

Summary

Issues involved: Whether charges of washing, cleaning, purging, and painting received from customers are includible in the assessable value of gas manufactured by M/s. Seema Oxygen & Acetylene Gases P. Ltd.

Analysis:

1. Argument by Appellant's Advocate:
The appellant's advocate argued that the charges collected for washing, cleaning, purging, and painting services provided by the appellants are not part of the manufacturing process of gas. They contended that these charges are for ancillary services and should not be included in the assessable value. The advocate cited a Supreme Court decision stating that charges like rentals for cylinders and notional interest income for ancillary services are not part of the assessable value of manufactured goods.

2. Counter-argument by SDR:
The SDR countered by stating that the charges for ancillary services such as cleaning and charging cylinders before filling them with gas are incidental to the manufacturing process of gases. They relied on previous tribunal decisions that held charges for filling cylinders within the factory to be includible in the assessable value. The SDR also cited a case where unloading and stacking charges were considered part of the assessable value.

3. Tribunal's Decision:
The Tribunal considered the arguments from both sides and referred to a Supreme Court judgment in a similar case involving charges for preparing bottles for reuse in bottling aerated water. In that case, the Supreme Court held that activities related to preparing reusable containers were not part of the manufacturing process. The Tribunal applied the same reasoning to the present case, concluding that charges for cleaning, washing, purging, and painting of cylinders received from customers should not be included in the assessable value. Therefore, the impugned order was set aside, and all three appeals were allowed with consequential relief.

This detailed analysis demonstrates how the Tribunal considered the arguments, referred to relevant legal precedents, and ultimately decided that the charges for ancillary services should not be included in the assessable value of the gas manufactured by M/s. Seema Oxygen & Acetylene Gases P. Ltd.