Assessable value excludes plant setup charges where technical documentation and commissioning relate only to site-specific erection work.

Engineering and technical know-how charges linked to erection, commissioning and technical documentation for setting up a plant were held not to form part of the assessable value of the manufactured goods. The agreement distinguished fabrication in the factory from erection and commissioning at the buyer's site, and the technical documentation was confined to layout, foundations, equipment loads and utility requirements for plant setup. On that basis, the charges were treated as site-related setting up expenses rather than pre-manufacturing or design inputs, and were excluded from valuation.

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Issues: Whether engineering and technical know-how charges received for erection, commissioning and supply of technical documentation were includible in the assessable value of the manufactured goods.

Analysis: The agreement showed that fabrication was to be undertaken in the appellant's factory, while erection and commissioning were to take place at the buyer's site. The only reference to technical documentation related to layout, foundations, equipment loads and utility requirements for setting up the plant. These charges were found to relate to site-related setting up activities and not to pre-manufacturing or design activities of the goods themselves.

Conclusion: The charges were not includible in the assessable value and the issue was decided in favour of the assessee.

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