1994 (10) TMI 154 - AT - Central Excise

Summary

Issues:
1. Inclusion of expenditure on staff colony expenses in assessable value.
2. Determination of includibility of expenditure on abnormal wastage.
3. Inclusion of Research & Development (R&D) expenditure in assessable value.

Analysis:

1. The appeal was filed by the department challenging the order of the Collector of Central Excise (Appeals) regarding the inclusion of various expenditures in the assessable value. The first issue was the inclusion of staff colony expenses. The department argued for includibility, which was not contested by the respondents' counsel. The plea for includibility of staff colony expenses was upheld.

2. The second issue pertained to the determination of includibility of expenditure on abnormal wastage. The department contended that the Collector (Appeals) had arbitrarily restricted the includibility to 50% without providing a basis for this decision. The respondents filed a cross-appeal challenging even the 50% includibility. The Tribunal set aside the decision on abnormal wastage and remanded the matter for reconsideration with the opportunity for both sides to present their contentions.

3. The third issue involved the inclusion of R&D expenditure in the assessable value. The department argued for the inclusion of 33-1/3% of the R&D expenditure, citing reasons related to the manufacturing of different types of elevators. The respondents' counsel disagreed, stating that the expenditure on non-manufactured elevators should also be included. The Tribunal upheld the decision of the Collector (Appeals) regarding the R&D expenditure, considering the reasons provided in the impugned order.

4. The Tribunal found that the reasons given by the Collector (Appeals) regarding the R&D expenditure were acceptable, especially since the respondents were not manufacturing a certain type of elevator. The appeal was partly allowed in favor of the department, and the matter was remanded for further consideration as per the Tribunal's directions. The cross objections were also disposed of accordingly.

This judgment addressed the issues of includibility of staff colony expenses, abnormal wastage expenditure, and R&D expenditure in the assessable value, providing detailed reasoning for each decision and ensuring a fair opportunity for both parties to present their arguments.