2015 (10) TMI 2281 - SC - Central Excise

Valuation of goods - whether the installation, erection and commissioning charges for equipment installed at customer s premises and values thereof can be added/included for determining the assessable value - Held that - On the facts of this case, while coming to the aforesaid conclusion, the CESTAT has relied upon the judgments of this court in PSI Data System Ltd. v. Collector 1996 (12) TMI 47 - SUPREME COURT OF INDIA , Mittal Engineering Works Pvt. Ltd. v. Collector 1996 (11) TMI 66 - SUPREME COURT OF INDIA , holding that inclusion of installation, erection and commissioning charges for equipment installed at customer s premises cannot be added/ included to determine the assessable value. - This is obvious conclusion on reading of Section 4 of the Central Excise Act as per which the transaction value is to be arrived at at the time of clearance of the goods at the factory gate. All the expenses which are incurred post clearance (that too, after the supply of equipment) in respect of installation, etc., could not have been taken into consideration in the facts of the present case as noted by the CESTAT. - No merit in appeal - Decided against Revenue.

Summary

Issues:
Whether installation, erection, and commissioning charges for equipment installed at customer's premises can be added for determining the assessable value.

Analysis:
The case involved M/s. Brimco Plastic Machinery Pvt. Ltd., engaged in manufacturing excisable goods and providing machinery in unassembled form to customers. The Department sought to add installation costs to the transaction value, but the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) overturned the decision. The primary issue was whether charges for installation at customer premises should be included in the assessable value.

The Supreme Court analyzed the situation, considering Section 4 of the Central Excise Act, which mandates determining transaction value at the time of goods clearance at the factory gate. The Court referenced precedents like 'PSI Data System Ltd. v. Collector' and 'Mittal Engineering Works Pvt. Ltd. v. Collector,' which established that installation charges should not be included in the assessable value. The Court emphasized that expenses incurred post-clearance, such as installation costs, should not influence the assessable value.

Ultimately, the Court dismissed the appeal, affirming CESTAT's decision. The judgment highlighted the importance of adhering to the statutory provisions and established legal principles in determining the assessable value of goods for excise duty purposes.