1994 (10) TMI 141 - AT - Central Excise

Summary

Issues involved:
The judgment involves the issue of whether inspection charges for goods manufactured by the appellants should be included in the assessable value or not.

Details of the Judgment:

1. The department contended that inspection charges should be included in the assessable value as they enhance the value of goods inspected and supplied under contract. The Assistant Collector and the Collector (Appeals) upheld this view, stating that inspection is a necessary process before goods can be considered fully manufactured and marketable. They held that inspection charges, like other manufacturing expenses, are necessary and ultimately borne by buyers.

2. The appellants, represented by a Chartered Accountant, argued that they have a detailed quality assurance plan and department, and the inspection charges incurred by customers should not be included in the assessable value. They cited a Tribunal decision supporting their stance and referred to relevant case law to support their argument.

3. The Departmental Representative contended that inspection charges should be included in the assessable value based on contractual obligations and the principle that all costs of tests before making goods marketable should be borne by manufacturers. They cited legal precedents to support their position.

4. The Tribunal considered the arguments of both sides and noted that the appellants have a comprehensive quality assurance department and are contractually bound to supply fully finished goods. The Tribunal found that the appellants' reliance on previous decisions supported their case for excluding inspection charges from the assessable value. Therefore, the appeals were allowed.

Separate Judgment:
A stay order was granted based on a previous decision covering the same issue, and the appeal was scheduled to be heard with connected appeals listed on the same day.