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TMI Blog2024 (9) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... rsement of such testing charges by the manufacturer supplier is not includible in the assessable value. This issue has been considered by larger bench of this Tribunal in the case of BHASKAR ISPAT PVT. LTD [ 2004 (3) TMI 102 - CESTAT, NEW DELHI ] wherein, the larger bench answered the reference holding that ' cost of additional testing conducted at the request of the customer and the cost of such testing being borne by the customer, are not includible in the assessable value of the goods.' Thus, it is settled law that any testing charges for the testing done by third party on the request of the customer and reimbursement of the same to the manufacturer supplier, the said testing charges is not includible in the assessable value of the excisable goods supplied on payment of duty. The issue in hand is no longer res-integra in the light of the above judgments. Therefore, in the present case the testing charges is not includible in the assessable value of excisable goods manufactured and cleared by the appellant on payment of duty. The impugned order is set aside to the extent it upheld the demand, interest and penalty - Appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. We find that in the present case the Revenue sought to include the testing charges of testing conducted by third party on the request of the customer in the assessable value of excisable goods on which test was conducted. We find that in the facts of the present case the testing was conducted not as a part of the obligation of the appellant but in a special case when the request was made by the customer to conduct such test. In this regard, we scan the copy of the bill for reimbursement of such testing charges as below: From the above bill raised for reimbursement of the testing charges it is clear that the test was done as per the letter No. CC/ENGG- TL/WR:Moosebear:Smita dated 14.09.2012of the customer M/s Power Grid Corporation of India Limited whereby they have made specific request for conducting such test. Therefore, the test was conducted by third party on the request of the customer M/s Power Grid Corporation, in such case the testing charges cannot be part and partial of the manufacture of excisable goods in the hand of the appellant consequently the same is not includible in the assessable value of the excisable goods. On the identical facts and circumstances various j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) and in the case of Hindustan Development Corporation Ltd. v. C.C.E., Calcutta, reported in 1996 (85) E.L.T. 58 (Tribunal) and the appeal filed by the Revenue was dismissed by Hon ble Supreme Court reported in 1996 (86) E.L.T. A162 (S.C.) - C.C.E. v. Hindustan Development Corporation Ltd. 5. In view of the above settled position, we hold that cost of additional testing conducted at the request of the customer and the cost of such testing being borne by the customer, are not includible in the assessable value of the goods. The issue referred to the Larger Bench is answered in the above terms. 6 . No other issue is involved in the present appeal. Therefore, we take up the appeal for disposal. The Revenue filed this appeal on the ground that the cost of additional and secondary inspection carried out at the request of the buyer and for which buyer has to pay, is includible in the assessable value of the goods. As discussed above, as we held that such charges are not includible in the assessable value of the goods. Therefore, we find no merit in this appeal and the same is dismissed. 4.2 The identical issue has been considered by the principal bench of this Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court of India in case of Collector of C.E., 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Maruti Suzuki India Ltd. (supra) was only on inspection done on compulsory PDI done in all cases by the appellant in that case. It was not the case before the Larger Bench that PDI inspections were done at the instance of the buyer. In view of the interpretation made by this bench in the case of CCE, Ahmedabad-II v. Johnson Pumps (I) Ltd. (supra) PDI charges recovered at the instance of the buyer are not includible in the assessable value and accordingly appeal filed by the revenue is required to be rejected and cross objection filed by the respondent is required to be allowed. 6 . In view of the above observations, appeal filed by the revenue is rejected and the cross objection filed by the respondent is allowed. In view of the above judgments, it is settled law that any testing charges for the testing done by third party on the request of the customer and reimbursement of the same to the manufacturer supplier, the said testing charges is not includible in the assessable value of the excisable goods supplied on payment of duty. The issue in hand is no longer res-integra in the light of the above judgments. Therefore, we are of the considered view that in the present case the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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