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2024 (6) TMI 760 - AT - Central ExciseValuation of the goods - Inclusion of inspection charges paid to RITES in the assessable value of the dutiable goods - HELD THAT - It is found that in the appellant s own case for an earlier period M/S. PASUPATI ISPAT PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, BHUBANESWAR-I, ORISSA 2023 (3) TMI 1499 - CESTAT KOLKATA , this issue came up before this Tribunal, wherein it was observed that ' The reimbursed receipts do not form part of their income and thus this is not an additional consideration. This is also relevant to observe that RITES raised the bills to the Appellant charging Inspection charges as per agreement amongst RITES, the Appellant and the customer. This is variably from the records that the Inspection charges were paid to RITES by the Appellant on behalf of their customers and the same amount was reimbursed by the customers and there is no difference between the amount paid and the reimbursed receipts. Both the amounts are matching.' As the issue has already been settled by this Tribunal in the appellant s own case for an earlier period, therefore, following the same decision, the appellant is not liable to pay duty on account of the alleged undervaluation. The impugned order is set aside - appeal allowed.
Issues: Valuation of goods - Inclusion of inspection charges in assessable value
In this case, the appellant challenged the valuation of goods where the Revenue sought to include inspection charges paid to RITES in the assessable value of dutiable goods cleared by them. The appellant, engaged in the manufacture of various products supplied to Indian Railways, had the goods inspected by RITES on behalf of customers as per contract requirements. The inspection charges were paid by the appellant to RITES on behalf of customers and later reimbursed by the customers. The appellant contended that their goods were marketable even without inspection, which was done at the buyer's instance. A Show Cause Notice was issued proposing duty demand, interest, and penalty for a specific period. The adjudicating authority confirmed the duty demand, interest, and imposed a penalty. On appeal, the Commissioner (Appeals) upheld the demands, leading the appellant to appeal to the Tribunal. The appellant's counsel argued that a similar issue had been settled in their favor in a previous case before the Tribunal. The Revenue's representative relied on the findings of the impugned order. After hearing both parties, the Tribunal referred to the previous decision in the appellant's case, where it was held that inspection charges recovered from buyers and paid to a third-party agency were not includible in the assessable value. The Tribunal noted that the inspection charges were debited to customers' accounts for reimbursement, not constituting additional consideration. The Tribunal allowed the appeal based on the earlier decision, stating that the appellant was not liable to pay duty due to alleged undervaluation. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. Therefore, the Tribunal, following its prior decision in the appellant's case, held that the appellant was not required to pay duty on the alleged undervaluation due to the inclusion of inspection charges in the assessable value of the goods. The appeal was allowed, and the impugned order was set aside.
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