2017 (1) TMI 758 - AT - Central Excise

Valuation - whether the amounts recovered for providing of drawings and documents in respect of the goods manufactured and supplied by the appellant is includable in the assessable value of the goods? - Held that - the drawings are not used for the purpose of manufacturing of the goods manufactured by them because the piping drawings is for laying of pipes which has taken place at the site only and the fabrication drawings is related to goods for construction and the construction is also taken place at the site. Drawings of both the items are not related to or not required for the manufacture - the value of these drawings are not includable in the assessable value - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Inclusion of amounts recovered for providing drawings and documents in the assessable value of goods.

Analysis:
The issue in this case revolves around whether the amounts recovered for providing drawings and documents in relation to goods manufactured and supplied by the appellant should be included in the assessable value of the goods. The Tribunal had previously held that certain drawings were not related to the manufacture of final products but were associated with post-clearance activities. However, for two specific items, the matter was remanded to ascertain if they were related to the manufacture of the final products. The adjudicating authority confirmed the demand, including the value of these two drawings. The Commissioner (Appeals) upheld the demands, emphasizing that the drawings were prepared by technical experts involving considerable expenditure. The appellant argued that the drawings for Piping Material Specifications and Equipment Fabrication were not related to the manufacture and supply of goods but were for submission to various authorities. The Tribunal examined the details of the drawings provided by the appellant and concluded that the drawings were not used for manufacturing purposes but for activities post-manufacture. Consequently, the Tribunal held that the value of these drawings should not be included in the assessable value of the goods.

This detailed analysis considered the arguments presented by both parties, the previous Tribunal decision, the findings of the adjudicating authority and the Commissioner (Appeals), and the specific details of the drawings in question. The Tribunal's decision was based on the lack of nexus between the drawings and the manufacturing process of the goods, leading to the exclusion of the drawing charges from the assessable value. The judgment highlights the importance of establishing a direct connection between additional charges for drawings and the manufacturing process to determine their inclusion in the assessable value of goods.