1995 (3) TMI 276 - AT - Central Excise

Summary

Issues involved: Determination of liability to pay duty on goods manufactured, inclusion of inspection charges in assessable value, applicability of extended period under Section 11A of Central Excises and Salt Act, 1944, and comparison with Tribunal decisions.

Summary:
The Appellate Tribunal CEGAT, New Delhi heard two appeals filed by M/s. Hindustan Development Corporation Limited challenging duty demands imposed by the Additional Collector of Central Excise, Calcutta-l Collectorate. The dispute centered around the inclusion of inspection charges paid by customers in the assessable value of goods, specifically Railway Points and Crossing. The Collector held the extended period under Section 11A applicable due to non-disclosure of inspection charges in price lists. The duty demands were confirmed in two adjudication orders.

In the first appeal, the appellants argued that Tribunal decisions in similar cases supported their position, citing precedents involving inspection charges paid by customers. They also contended that the notices leading to the orders were time-barred. The Senior Departmental Representative opposed these arguments, emphasizing the necessity of including testing charges in the assessable value based on the manufacturing process and value enhancement of goods.

Upon review, the Tribunal found the issue covered by previous decisions, notably the case of Shree Pipes Ltd. The Tribunal rejected the Department's argument that tests by RITES were in lieu of manufacturer inspections, noting the appellants' evidence of prior inspections and certifications. It was established that RITES tests were additional and not part of the manufacturing cost. Consequently, the impugned orders were set aside, and the appeals were allowed on merit.

Given the allowance of the appeals based on merit, the Tribunal did not address the appellants' alternate plea regarding the extended period for issuing show cause notices.