Post-clearance erection and commissioning charges excluded from assessable value where goods were cleared ready to use.

Erection, installation and commissioning charges collected for transformers and voltage stabilizers at the customer's premises after the goods were cleared in ready-to-use condition were held not to form part of assessable value. The post-clearance activities were not part of the manufacturing process, and the receipts were not attributable to the sale of the goods as manufactured and cleared from the factory. The analysis was aligned with the Board circular and the Supreme Court ruling relied on, and the appeal was allowed in favour of the assessee.

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Issues: Whether erection, installation and commissioning charges received for transformer and voltage stabilizer, undertaken at the customer's premises after clearance of goods, form part of the assessable value.

Analysis: The contract receipts related only to erection, installation and commissioning undertaken after the goods were cleared from the factory in a ready-to-use condition. Such post-clearance activities were not part of the manufacturing activity. On these facts, the charges were not attributable to the sale of the goods as manufactured and cleared from the factory. The decision was also consistent with the Board circular and the Supreme Court ruling relied upon.

Conclusion: The erection, installation and commissioning charges do not form part of the assessable value and the appeal is allowed in favour of the assessee.

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