Verification and stamping charges for flow meters may be excluded from transaction value on a prima facie basis

Charges collected for verification and stamping of flow meters, required before use under the Standards of Weights and Measures (Enforcement) Act, 1985, were treated on a prima facie basis as excludible from the transaction value of the goods. Because those charges related to a statutory pre-use exercise rather than the sale price of the goods, the demand was considered fit for interim relief. Waiver of pre-deposit and stay of recovery were therefore granted in respect of the duty and penalty amounts.

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Issues: Whether charges collected for verification and stamping of flow meters were prima facie excludible from the transaction value of the goods, warranting waiver of pre-deposit and stay of recovery.

Analysis: The goods were stated to require verification and stamping before use under Section 24 of the Standards of Weights and Measures (Enforcement) Act, 1985, and the assessee had collected charges for undertaking that statutory exercise. On a prima facie appraisal, such charges were treated as not forming part of the transaction value of the goods. The demand was therefore considered to be subject to waiver of pre-deposit at the interim stage.

Conclusion: The assessee was granted waiver of pre-deposit and stay of recovery in respect of the duty and penalty amounts.

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