Installation and commissioning charges excluded from assessable value where goods are cleared from factory and later erected at site.

Installation and commissioning charges under a composite supply-and-installation contract are not includible in the assessable value of chillers and air handling units cleared from the factory. The charges relate to post-removal erection or commissioning at the buyer's premises, and do not form part of the excisable goods themselves. Where duty is paid on the goods at factory clearance, no further duty can be levied on the cost of installation or commissioning that merely brings the plant into existence at site. The demand based on such inclusion was therefore not sustainable.

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Issues: Whether installation and commissioning charges received under a composite supply and installation contract are includible in the assessable value of chillers and air handling units cleared from the factory.

Analysis: In a contract involving supply as well as installation and commissioning of an air-conditioning plant, the charges attributable to installation and commissioning are not part of the assessable value of the goods removed from the factory. The plant as installed is not itself the excisable goods cleared from the factory, and duty cannot be levied on the cost of erection or commissioning where those expenses relate to bringing into existence an immovable property. The Board's circular and the cited precedent support the position that, where goods are cleared from the factory on payment of duty and later installed at the buyer's premises, no further duty is payable on installation and commissioning charges.

Conclusion: The installation and commissioning charges were not includible in the assessable value, and the demand based on such inclusion could not be sustained.

Ratio Decidendi: Charges for installation and commissioning are not includible in the assessable value of goods cleared from the factory when they relate to post-removal erection or commissioning of an immovable property and do not form part of the excisable goods themselves.

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