2009 (9) TMI 474 - AT - Central Excise

Valuation- The issue is as to whether the pre-inspection charges paid by the respondent to a third person at the behest of their buyer and reimbursed by their buyer would get added in the assessable value or not. The Commissioner (Appeals) while holding so has taken note of the precedent decisions of the Tribunal laying down that such inspection charges conducted in few cases at the request of their buyer, cannot be held liable to be included in the assessable value. Accordingly, he dropped the demand of Rs. 25,152/- raised against the respondent. Held that- The issue stands discussed in detail by Commissioner (Appeals), who has followed the precedent decisions of the Tribunal as also Board s circular. We find no infirmity in the said order of the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.

Summary

Issues:
- Appeal against order passed by Commissioner (Appeals) by Revenue.
- Whether pre-inspection charges reimbursed by buyer should be added to assessable value.
- Interpretation of various Tribunal decisions and Supreme Court judgments on similar issues.
- Relevance and impact of Board's Circular on the case.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT, Ahmedabad was against the order passed by the Commissioner (Appeals). The Revenue filed the appeal, and the respondent requested an adjournment.
2. The main issue revolved around whether the pre-inspection charges paid by the respondent to a third party, reimbursed by their buyer, should be included in the assessable value. The Commissioner (Appeals) had dropped the demand raised against the respondent based on previous Tribunal decisions and the Hon'ble Supreme Court's confirmation of such decisions.
3. The Tribunal noted that the Commissioner (Appeals) considered various decisions and a Board's Circular in favor of the assessee. The Commissioner relied on Supreme Court cases like Collector of C.E., Jaipur v. M/s. CIMMCO Ltd. and Commissioner v. Hindustan Motors Ltd., which held that certain inspection charges are not includible in the assessable value.
4. The Tribunal further discussed the legal scrutiny of CBEC Circulars and their withdrawal due to inconsistencies with Tribunal judgments. Following the precedent set by previous decisions, the Tribunal concluded that the third party's inspection charges, reimbursed by buyers, should not be added to the assessable value of goods, thereby rejecting the duty demand.
5. The Revenue, through the JDR, relied on another Board's Circular, but the Tribunal found that it did not apply to the specific pre-inspection charges in question. The Commissioner (Appeals) had thoroughly analyzed the issue, aligning with Tribunal decisions and the Board's circular, leading the Tribunal to uphold the Commissioner's order and reject the Revenue's appeal.