Composite contract charges and post-removal expenses are excluded from Rule 6(3)(b) computation where they are not part of assessable value.

For computing the amount payable under Rule 6(3)(b) of the Cenvat Credit Rules, 2002, charges for transportation and for laying, jointing, testing and commissioning under a composite supply contract were held not includible where they did not form part of the assessable value of the excisable goods. The contract price covered both goods and site-related services, so it could not be treated as the value of the pipes alone. A Cost Accountant's certificate supporting bifurcation reinforced exclusion of post-removal expenses. The demand based on including those charges was therefore unsustainable.

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Issues: Whether, for computing the amount payable under Rule 6(3)(b) of the Cenvat Credit Rules, 2002, the cost of transportation, laying, jointing, testing and commissioning of pipes supplied under a composite contract is includible in the total price on which 8% is to be calculated.

Analysis: The pipes supplied for the exempted water supply scheme were cleared under a composite contract that included transportation and site-related services. The price shown in the contract therefore did not represent only the value of the pipes. The total price for the purpose of Rule 6(3)(b) could not be treated as materially different from the assessable value under Section 4 of the Central Excise Act, and post-removal expenses such as transportation and commissioning were not liable to be included. The existence of a Cost Accountant's certificate supporting bifurcation further supported the exclusion of those charges.

Conclusion: The cost of transportation and the cost of laying, jointing, testing and commissioning were not includible in the value adopted for computation under Rule 6(3)(b), and the demand was unsustainable.

Final Conclusion: The appeals succeeded and the demands based on inclusion of those charges were set aside with consequential relief.

Ratio Decidendi: For computing the amount payable under Rule 6(3)(b) of the Cenvat Credit Rules, 2002, charges for transportation and for laying, jointing, testing and commissioning under a composite contract are not includible where they do not form part of the assessable value of the excisable goods.

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