Erection and commissioning charges after manufacture are excluded from excise assessable value for boilers.

Charges separately recovered for erection, installation and commissioning at the customer's site after manufacture and supply of boilers do not form part of the assessable value for central excise duty. The Court applied the principle that post-manufacturing expenses and site installation activities are outside the scope of manufacture, so they cannot be added to the value of excisable goods. On that basis, the separate erection and commissioning charges were not liable to excise duty and were excluded from assessable value.

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Issues: Whether erection and commissioning charges separately recovered from customers could be included in the assessable value of boilers for the purpose of central excise duty.

Analysis: The charges in question related to installation, erection and commissioning at the customer's site after the boilers had been manufactured and supplied. The Court applied its earlier decisions holding that installation or erection of a plant or equipment is not part of the manufacture of excisable goods and that post-manufacturing expenses cannot be added to the assessable value. On that principle, the separate charges for erection and commissioning were not liable to excise duty.

Conclusion: Erection and commissioning charges were not includible in the assessable value and the issue was decided in favour of the assessee.

Ratio Decidendi: Charges for erection, installation or commissioning undertaken after manufacture and supply at the customer's site do not form part of the assessable value of excisable goods.

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