Erection supervision charges excluded from assessable value when goods were complete before clearance and only reassembled at site.

Site erection supervision charges were held not to form part of assessable value where the goods emerged as complete machines at the factory, were tested and inspected before clearance, and were dismantled only for transport and reassembled at the customer's site. The mere inclusion of erection or supervision in the supply arrangement did not establish that the expenditure was incurred in relation to manufacture. Such charges are includible only if they are shown to relate to manufacture of the goods before clearance; on these facts, they were excluded from assessable value.

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Issues: Whether the costs incurred for supervising erection at the customer's site were includible in the assessable value of the electric overhead travelling crane and the nitrogen plant.

Analysis: The goods were found to emerge as complete machines at the manufacturer's factory. They were tested and inspected at the factory before being disassembled only for ease of transport and re-assembled at the customer's site. The contract and inspection terms indicated that the goods were complete before clearance, and the mere fact that erection or supervision formed part of the supply arrangement did not by itself establish that such charges were incurred in relation to manufacture.

Conclusion: The site erection supervision charges were not includible in the assessable value.

Final Conclusion: The appeal succeeded and the addition of erection supervision charges to assessable value was set aside.

Ratio Decidendi: Charges for erection or supervision at the customer's site are not includible in assessable value unless they are shown to be charges incurred in relation to manufacture of goods that are otherwise complete before clearance.

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