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TMI Blog1994 (10) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... y wagons, items of plant and machinery and structural goods like valves, etc. The department's case is that the appellants had entered into various contracts for supplying the goods to the various buyers on condition that all such goods should be inspected either by the buyers or their hired inspecting agency like RITES. The department found that the appellants had not included the inspection charges in the assessable value which, according to the department, enhanced the value of the goods so inspected and supplied under contract. The department also was of the view that the inspection was indispensable condition for delivery of the goods and, therefore, must form part of the assessable value. In various orders passed by the Assistant Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The contracts also have a provision making the appellants liable to liquidated damages. The ld. Chartered Accountant pointed out that the appellants have a detailed assurance plan for their products. They have a full-fledged quality assurance department under experienced personnel. The ld. Chartered Accountant, in this regard, referred to the organisation chart of this department. They are bound to supply fully marketable wagons/engineering goods. The employment, by some customers NTPC, of agency of RITES to inspect the goods at appellants ` factory is only in exercise of the customers' right to inspect. In the case of another customer, there is no such inspection at all by the customer, namely, Maihar Cement. The ld. Chartered Accountan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at test and inspection of the goods is in terms of the contract for their sale. Since it was a contractual obligation and performance guarantee of the goods, these charges have to be included irrespective of as to who incurs these charges. The ld. D.R. contended that all the costs of tests before making the goods marketable, are to be borne by the manufacturers. He reiterated the basic principle laid down in this regard by the Supreme Court in the case of Bombay Tyres International v. Collector of Central Excise - 1983 (14) E.L.T. 1896. He also relied upon the decision of the Tribunal in the case of Madhav Nagar Cotton Mills v. Collector of Central Excise - 1986 (25) E.L.T. 443, holding that a special checking is nothing but ensuring flawle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract relating to Maihar Cement does not talk of inspection at the appellants' premises. The terms and conditions in the case of Maihar Cement says that goods are purchased subject to approval and the customer reserves the right to reject the goods which are found to be of inferior quality and which are supplied in accordance with the terms and conditions of the order or which are not approved by the customer's factory officer. Therefore, it is clear from the above that the appellants are contractually bound to supply fully finished goods which can be put to use by the customer and the quality audit which the customers are doing is in terms of the right which they have reserved for themselves in this respect. The payment for engaging the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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