1998 (4) TMI 240 - AT - Central Excise

Summary

Issues:
1. Challenge to Order-in-Original No. 34/89 passed by the Additional Collector of Central Excise, New Delhi.
2. Allegations of suppression of correct value and duty evasion.
3. Inclusion of certain charges in the assessable value.
4. Dispute regarding specific elements in the charges.
5. Jurisdictional authority's scrutiny of contracts and duty calculation.

Analysis:
1. The appeal challenged Order-in-Original No. 34/89 passed by the Additional Collector of Central Excise, New Delhi, which was preceded by an Order set aside by the Collector (Appeals) due to jurisdictional issues. The Competent Authority then conducted the adjudication process.

2. The appellant, engaged in manufacturing Computers, faced allegations of suppressing the correct value and duty evasion. The dispute arose from the inclusion of Software System Engineering charges in the assessable value, leading to a demand for differential duty. The appellant contested the notice on merit and limitation grounds.

3. The show cause notice accused the appellant of undervaluation and non-declaration of full value, utilizing self-determination. However, the contracts submitted did not mention the disputed charges, while the contracts themselves detailed the excluded charges, indicating the parties' belief that excise duty did not apply to them.

4. The charges in dispute encompassed various aspects like Functional Specification Study, Man-Machine Interfaces, and Training of personnel. The Additional Collector excluded Training charges from the assessable value but included others. The disagreement focused on Environmental Specifications, Flexibility Expansion, Designing Circuit Diagram, and Front Panel Layout.

5. The Tribunal analyzed the elements in dispute, concluding that Environmental Specifications, Flexibility Expansion, Site System, and Front Panel Layout did not impact the excisable product's manufacture and clearance. The advice provided by the appellant aimed at enhancing product marketability and goodwill, rather than directly affecting duty calculation. Consequently, the Tribunal set aside the Order, ruling in favor of the appellant.