2008 (5) TMI 62 - AT - Central Excise

CESTAT rules optional service charges not part of ICAM assessable value

The Appellate Tribunal CESTAT NEW DELHI set aside the lower authority's order, ruling in favor of the appellant. It was held that charges for optional ... Appellants after selling ICAM systems, also do job of erection, installation etc. - erection, installation, supervision & commissioning at site or training of the customer’s employees are purely optional & impugned activity results in ICAM systems becoming fixed to the ground and becoming immovable property – held that impugned charges on account of installation etc. are clearly post removal expenses, having no nexus with manufacturing/marketing of the goods and hence not includible in A.V. Issues:- Inclusion of charges for erection, installation, commissioning, supervision, and training in the assessable value of ICAM systems.Detailed Analysis:1. Background and Dispute: The appeal was against the order confirming duty demand and imposing penalties on the appellant for the period from 1-7-2000 to 31-12-2004. The dispute revolved around whether charges for optional services like erection, installation, commissioning, supervision, and training should be included in the assessable value of ICAM systems.2. Appellant's Arguments: The appellant contended that the charges for these services are not in connection with the sale of goods and should not be included in the transaction value. They cited various judgments, including those of the Hon'ble Supreme Court and Tribunal, to support their position that such charges are not includible.3. Revenue's Position: The Revenue argued that the disputed charges are related to the sale and should be included in the assessable value of the ICAM systems.4. Tribunal's Analysis: The Tribunal examined the nature of the services provided by the appellant, noting that they were optional for customers and the appellant was registered as a service tax assessee for these services. The Tribunal referenced past judgments and held that charges for erection, installation, commissioning, supervision, and training were not includible in the assessable value.5. Decision: The Tribunal found that the lower authority's order was not sustainable and set it aside, allowing the appeal in favor of the appellant. The charges for optional services were deemed not includible in the assessable value of the ICAM systems.This detailed analysis highlights the key arguments, legal precedents, and the ultimate decision of the Appellate Tribunal CESTAT NEW DELHI regarding the inclusion of specific charges in the assessable value of ICAM systems.