2017 (6) TMI 1062 - AT - Central Excise

Tribunal remands appeal for detailed contract assessment, stresses fair value determination

Phils Heavy Engineering Pvt. Ltd. Versus Commissioner of Central Excise, Thane-I

The Tribunal remanded the appeal to the adjudicating authority for a detailed examination of the assessable value in the composite contract, instructing ... Valuation - charges incurred for assembly of tanks - Held that: - When the appellant agreed that the term of contract was to execute a composite supply, it was not a split up case of supply and provision of service - the appellant is directed to submit all details as directed by the Tribunal in its order dated 7.7.2006 for objective examination of the case by learned Adjudicating Authority and pass appropriate order - appeal allowed by way of remand. Issues:1. Whether the installation charges should be included in the assessable value for levy of duty.2. Determination of assessable value in a composite contract for supply of goods combined with provision of service.3. Benefit of previous tribunal decisions on similar cases to the present appellant's case.Analysis:1. The Tribunal, in a previous order, opined that charges for assembly of tanks are includible in the assessable value, except for civil construction charges. The appellant was directed to provide a breakup of the installation costs to determine what should be included in the cost of the tank. However, the readjudication order did not thoroughly test what should be included, leading the appellant to request a reexamination by the adjudicating authority.2. The appellant argued that the contract was a composite supply of goods and services, with the intention not to split the consideration between goods and services. Citing a previous decision, the appellant contended that charges for services independent of the supply should not be included in the assessable value. The Tribunal directed the appellant to submit all details for an objective examination by the adjudicating authority to determine the assessable value correctly.3. The appellant relied on previous tribunal decisions in other cases to support its defense. However, the Tribunal clarified that the appellant's case involved the totality of the contracts, unlike the cases cited. The Tribunal directed the appellant to follow the previous order and submit all necessary particulars for a proper readjudication by the adjudicating authority, emphasizing the need for a reasoned and speaking order.In conclusion, the Tribunal remanded the appeal to the adjudicating authority for a detailed examination of the assessable value in the composite contract, instructing the appellant to provide all relevant details within a specified timeframe. The Tribunal's decision focused on ensuring a thorough assessment of the contract terms and costs to arrive at a fair and accurate determination of the assessable value for levy of duty.