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TMI Blog1991 (9) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... the specifications were furnished by the buyers and the engineers at Calcutta, designed the special coils and after manufacturing the same accordingly, sold the product. It was found that the manufacturing cost included the expenses incurred for drawing the design for the special coils. The assessing authority, on the basis of the material on the record, observed: "As for engineering design fees, these are collected from the buyers for designing the special coils according to their specifications and these charges are part and parcel of the total manufacturing cost. These are nothing but presale charges and are to be included in the total cost of the products sold. As such they are exigible to tax." The appellate authority, in appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only for the purpose of manufacture of the special coils were supplied to the customers. The findings of fact which are based on sufficient material, therefore, unmistakably show that while effecting the sales the assessee had collected the fee for designing the special coil and that fee was included in the total cost of the manufacture of the product. The mere fact that the assessee showed, in the invoice, "design and engineering fee" separately would not imply that the same was not included in the cost of manufacture so as to fall within the sale price of the goods sold to the customers. The Tribunal rightly rejected the plea raised by the assessee, which has also been reiterated before us, that the fee charged was for specialised te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So far as Commissioner of Sales Tax v. Studio Ratan Batra Private Ltd. [1975] 35 STC 522 (Bom) is concerned, the substance of the contract in that case was for the preparation and supply of designs and it was in that context held that the material involved in the preparation and supply of the design, namely, the piece of paper upon which the design was drawn and the ink or paint with which it was drawn, were merely incidental and that the real essence of the contract was the skill of the artists who draw the design for the customers. That case has not even the remotest application to the facts and circumstances of the instant case where the products were sold with the materials manufactured as per the specifications based on the designs pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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