1997 (12) TMI 458 - AT - Central Excise

Summary

Issues:
- Challenge to the correctness of the decision by the Collector of Central Excise regarding the liability to pay duty on transformers including impulse testing charges.
- Interpretation of whether charges incurred for specific processes outside the factory should be included in the assessable value.
- Comparison of previous Tribunal decisions regarding similar issues.
- Consideration of whether the charges for isomerisation processes are comparable to testing charges.
- Application of previous Tribunal decisions and Supreme Court dismissal of appeal.

Analysis:
The appeal before the Appellate Tribunal challenges the decision made by the Collector of Central Excise regarding the liability of the appellant to pay duty on transformers, specifically focusing on the inclusion of charges for impulse testing conducted outside the factory by specialized agencies like BHEL and CPRI. The appellant's counsel argued that a similar issue had been addressed in previous Tribunal cases, such as Ashok Transformers Pvt. Ltd. v. C.C.E. and Shree Pipes Ltd. v. C.C.E., where it was held that such charges should not be part of the assessable value. The appellant sought a favorable decision based on these precedents.

In response, the Departmental Representative (DR) highlighted a different Tribunal decision in Collector of Central Excise v. M/s. Impact Containers Ltd., where charges for isomerisation processes carried out outside the factory were deemed includible. The DR argued that this decision warranted a reconsideration of the issue at hand, suggesting that the charges in question were similar to those in the cited case and should be treated accordingly.

The appellant's counsel distinguished the present case from the one referenced by the DR, emphasizing that the issue in question pertained specifically to impulse testing charges for transformers, not isomerisation processes. The counsel contended that the previous Tribunal decisions on testing charges should guide the current decision-making process, as these decisions favored the assessee.

After considering the arguments presented, the Tribunal examined the nature of the charges in dispute. It differentiated between charges incurred for specific processes integral to manufacturing, like isomerisation, and optional testing conducted outside the regular manufacturing process, such as impulse testing for transformers. The Tribunal noted that the previous decisions on impulse testing charges for transformers, including the Shree Pipes Ltd. case, provided a clear precedent for excluding such charges from the assessable value. The Tribunal also referenced a Supreme Court dismissal of an appeal related to this issue, reinforcing the validity of the previous decisions. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the assessee.