2002 (1) TMI 472 - AT - Central Excise

Case on Inspection Charges Inclusion in Assessable Value Remanded for Clarification

The Tribunal remanded the case regarding the inclusion of inspection charges in the assessable value of Railway Equipment manufactured by M/s. Greysham ... Valuation - Inspection/testing charges Issues:Whether charges of inspection of goods by M/s. RITES for Indian Railways are to be included in the assessable value of Railway Equipment manufactured by M/s. Greysham and Co.Analysis:The appeal by M/s. Greysham and Co. raised the issue of whether inspection charges by M/s. RITES for Indian Railways should be part of the assessable value of the Railway Equipment. The appellant argued that as per previous judgments, inspection charges paid by customers, such as Indian Railways, were not to be included in the assessable value. They cited cases like Escorts Ltd. v. CCE, Shree Pipes Ltd. v. CCE, and CIMMCO Ltd. v. CCE to support their stance. On the other hand, the respondent contended that all expenses until the clearance of goods should be included in the assessable value, emphasizing that in this case, the goods were supplied to Railways before reaching a marketable stage. They referred to the decision in Hindustan Gas & Industries Ltd. v. CCE to support their argument that testing costs should be part of the value if buyers insist on inspection before purchase.The Tribunal analyzed the arguments and previous judgments. They noted that in the cases cited by the appellant, the goods were sold after quality control by the assessee's own department, which was not the scenario in the present case. The Tribunal highlighted that the decision on whether testing charges should be included in the assessable value depended on whether the appellants had their testing facility, a crucial detail missing from the record. Due to this missing information, the Tribunal remanded the matter to the adjudicating authority to ascertain this fact before making a decision. The appeal was allowed by way of remand for further clarification on the presence of the appellants' testing facility.In conclusion, the judgment focused on the inclusion of inspection charges in the assessable value of Railway Equipment manufactured by M/s. Greysham and Co. The Tribunal emphasized the need to determine if the appellants had their testing facility before deciding on the inclusion of testing charges in the assessable value. The case was remanded for further investigation into this crucial factual aspect to make an informed decision.