Erection and commissioning charges were not shown to be disguised warranty charges, so they were excluded from assessable value.

Erection and commissioning charges were not proved to be warranty charges includible in assessable value because the warranty certificate showed warranty could continue even where erection was not done under the assessee's supervision, and the Revenue failed to establish that the entire charges were a disguised warranty levy. The material also indicated that labour and technical supervision costs were still incurred where such charges were collected. The appeal was therefore rejected in favour of the assessee.

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Issues: Whether the erection and commissioning charges collected by the assessee were warranty charges includible in the assessable value.

Analysis: The condition in the warranty certificate stated that warranty would cease if the purchaser did not opt for erection and commissioning under the assessee's supervision, but it also showed that in a substantial number of cases the assessee continued to extend warranty even where such erection was not undertaken by it. The Revenue did not substantiate its allegation that the entire erection and commissioning charges were a disguised form of warranty charges. The material also indicated that where such charges were collected, expenditure on labour or technical supervision would still be incurred by the assessee.

Conclusion: The charges were not proved to be warranty charges and were not shown to be includible in the assessable value on that basis; the appeal was rejected in favour of the assessee.

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