2017 (3) TMI 1078 - AT - Central Excise

Valuation - manufacture of computers - inclusion of Technical Service Charges - whether the Technical Service Charges recovered vide separate invoice are includible in the assessable value or not? - Held that - reliance was placed in the case of PSI Data Systems Ltd Vs Collector of Central Excise 1996 (12) TMI 47 - SUPREME COURT OF INDIA , wherein it was held that software, peripherals and technical service charges , are not includable in the assessable value of the computers - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether technical service charges recovered via separate invoice are includible in the assessable value of computers.

Analysis:
The appeal in question revolves around the inclusion of technical service charges in the assessable value of computers. The Tribunal noted that this was the third round of litigation on the matter. In a previous order, it was highlighted that principles of natural justice were violated by not allowing cross-examination of customers whose statements were relied upon. The Tribunal directed the Adjudicating Authority to reconsider the issue in light of these observations. However, the Commissioner, in the subsequent order, dismissed the importance of cross-examination, leading to a conflict with the Tribunal's directions and a ruling by the Delhi High Court. The Tribunal found the impugned order to be unsustainable as it did not adhere to the Tribunal's directions and overruled them. Consequently, the Tribunal set aside the impugned order and allowed the appeal.

Regarding the limitation argument raised by the appellant, the Tribunal acknowledged the absence of contumacious conduct and referred to a Supreme Court ruling stating that software, peripherals, and technical service charges are not to be included in the assessable value of computers. Given the findings on the main issue, the Tribunal did not delve into the limitation aspect. Ultimately, the appeal was allowed, granting the appellant consequential benefits as per the law.

This judgment underscores the importance of adhering to principles of natural justice, including the right to cross-examination in quasi-judicial proceedings. It also highlights the significance of following directives issued by higher authorities and courts. The decision provides clarity on the inclusion of technical service charges in the assessable value of computers, aligning with established legal precedents.