Assessable value exclusion for separate supervision charges accepted prima facie, with recovery stayed pending appeal.

Supervision charges collected under a separate service contract were treated as not automatically includible in the assessable value for central excise where the assessee showed a prima facie case that the charges were independent service charges with no demonstrated nexus to the supply of goods or to any specific valuation element. On that basis, the Tribunal granted full waiver of pre-deposit and stayed recovery of the demand pending disposal of the appeal.

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Issues: Whether the supervision charges collected under a separate service contract were prima facie includible in the assessable value for central excise duty, and whether recovery of the demand deserved to be stayed pending appeal.

Analysis: The demand arose from the inclusion of supervision charges in the assessable value. The assessee maintained that the charges were independent service charges under a separate contract, had no nexus with the supply of goods, and were not shown in the show cause notice to be linked to any particular supply or valuation. On the materials before it, the Tribunal found that the assessee had made out a prima facie case and that the cited decisions supported the contention that such service charges were not automatically includible.

Outcome: Full waiver was granted and recovery of the demand was stayed pending disposal of the appeal. Out-of-turn hearing was also directed.

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