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TMI Blog2015 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the buyer is not includable in the assessable value of the products cleared by them. - impugned order is not sustainable and liable to be set aside - Decided in favour of assessee. - Appeal No. E/1145/05 - - - Dated:- 3-11-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) For the Petitioner : Shri Bharat Raichandani, Advocate For the Respondent : Shri N.N. Prabhudesai, Supdt. (AR) ORDER Per: M.V. Ravindran This appeal is directed against Order-in-Appeal No. SVS/6 7/NGP-I/2005 dated 12.01.2005. 2. The relevant facts that arise for consideration in this appeal is whether the additional amount received by appellant towards the third party inspection charges undertaken at the instance of the buyer is includable in the transaction value or otherwise and whether the duty liability arises or not. Both the lower authorities have held that such charges are consideration for the sale of the goods and transaction value has to be increased on the amount received by the appellant for third party inspection charges. Coming to such conclusion the duty liability was confirmed with interest and equivalent penalty has been im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court in the case of Maruti Suzuki India Ltd. - 2013 (291) ELT A81 (S.C.) by dismissing the appeal of the assessee wherein the Tribunal held in favour of the assessee as reported at 2010 (257) ELT 226. 4. We have considered the submissions made by both sides and perused the records. 5. The issue, which is to be decided in this appeal is only regarding the includability or otherwise of an amount received by the appellant during the period August 1997 to March 2002 as additional inspection conducted on the products at the instance of buyer. Undisputed facts are the appellant is conducting his own inspection on the finished goods as a manufacturer would do so before clearance and the products are further tested on the specific instruction of various buyers. All buyers do not insist on third party inspection. The charges which are to be paid to the inspecting authorities is borne by the buyers and not by the appellant as the amounts paid as third party inspection chargers are reimbursed by the buyers. 6. The entire arguments of the learned D.R. as well as the impugned orders is that these inspection charges are to be considered as pre-requisite or pre-delivery inspectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inspection charges were not includible in the assessable value of the pipes and tubes. 6.4 We also note that in an identical issue this Tribunal in the case of Grasim Industries Ltd. (supra) held as under:- 6. In this case, the fact that liquid Chlorine manufactured by the Respondent is being sold by them either in their own tonners or in the customers tonners or even through pipeline, shows that Chlorine is marketable as such. It is also not disputed that testing is optional and the testing charges have been charged only in those cases where the liquid chlorine was supplied in the tonners brought by the customers and the customers had requested for testing of their Cylinder/tonners. In these circumstances neither the cost of tonners nor their testing charges would be includible in the assessable value of liquid chlorine. In fact, in this case, the testing of the tonners belonging to the customers on their request is an activity different from the sale of Chlorine which is marketable as such and, hence the charges for such testing cannot be said to be for the reason of or in connection with sale of Chlorine, as the customers could have got the testing of their tonners do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jaipur v. M/s. CIMMCO Ltd. - 1996 (84) E.L.T. 167 (S.C.) has upheld the Tribunal Order Nos. 296-301/94-A, dated 19-10-94 reported in 1994 (74) E.L.T. 687 (Tribunal), holding that inspection charges incurred by the customers are not includable in assessable value especially when they have a full-fledged quality assurance department. (ii) The Hon ble Supreme Court of India in case of Collector v. Hindustan Development Corpn. Ltd. - 1996 (86) E.L.T. A162 (S.C.), has upheld Tribunal Order Nos. 209 210/95-A, dated 8-3-95 which held that expenses incurred on account of additional tests conducted on customers requisitions are not includible in the assessable value. (iii) The Hon ble Supreme Court in case of Commissioner v. Hindustan Motors Ltd. - 2002 (140) E.L.T. A81 (S.C.), has held that pre-delivery inspection charges and after sales service charges incurred by dealer are not includible in assessable value of vehicles. Further, the Hon ble Tribunal under erstwhile Section 4 of the Act in following cases has held that cost of additional inspection charges borne by the customers carried out by a third party, is not includible in the assessable value. (i) M/s. Choksi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration, it would be appropriate to record the undisputed facts of the case wherein the issue has arisen for the consideration 6.5 From the foregoing, it is very clear that the inspection charges received as reimbursement by the appellant on third party inspection charges at the instance of the buyer is not includable in the assessable value of the products cleared by them. 6.6 As regards the various case laws cited by learned D.R. in respect of Maruti Suzuki India Ltd. (supra) which has been already distinguished by the Tribunal in the case of Lubi Submersibles Ltd. (supra) on factual matrix. As regards the judgement cited by learned D.R. in the case of Southern Structurals Ltd. (supra), we note that Lordships in para 6 has recorded the factual findings that the cost of testing at Government expenses could be on the assessee s account and will not be borne by anyone which would mean that the manufacturer has to pay the charges to third party in addition to normal inspection. This ratio is deduced from the para 12 of the judgement. 6.7 In the case of Rai Agro Industries Ltd. (supra) we find that factually the issue was valuation in respect of packing material s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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