2015 (10) TMI 35

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....thority has dismissed the appeal filed by the revenue. Under the Order-in-Original No. MP/66/DEMAND/06, dated 19-5-2006 demand raised against the respondent M/s. Luby Submersibles Ltd. was dropped by the adjudicating authority. The issue involved in these proceedings is whether Pre-Delivery Inspection (PDI) charges recovered by the respondent for conducting test at the instance of the buyer is liable to be included in the assessable value or not. The first appellate authority has relied upon the judgment of CESTAT Larger Bench in the case of Bhaskar Ispat Pvt. Ltd. [2004 (167) E.L.T. 189 (Tri. - LB)] wherein it was held that inspection done at the option of the buyer is not includable in the assessable value. Revenue has filed the present a....

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....medabad-II v. Johnson Pumps (I) Ltd. [2010 (251) E.L.T. 560 (Tri.-Ahmd.)] under which it is held that such PDI charges incurred on behalf of the buyer are not required to be added to the assessable value and thus C.B.E. & C. Circular No. 643/34/2002-CX, dated 1-7-2002 was held to be inapplicable. 4. Heard both sides and perused the case records. The issue involved in the present appeal filed by the revenue is whether PDI charges incurred only at the instance of the buyer are required to be added to the assessable value under Section 4 of the Central Excise Act, 1944 or not. The first appellate authority has rejected revenue's appeal on the ground that as per Larger Bench judgment in the case of Bhaskar Ispat Pvt. Ltd. (supra) PDI ch....

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....f Commissioner v. Hindustan Motors Ltd. - 2002 (140) E.L.T. A81 (S.C.), has held that pre-delivery inspection charges and after sales service charges incurred by dealer are not includible in assessable value of vehicles. Further, the Hon'ble Tribunal under erstwhile Section 4 of the Act in following cases has held that cost of additional inspection charges borne by the customers carried out by a third party, is not includible in the assessable value. (i)      M/s. Choksi Tube Co. Ltd. v. CCE, Ahmedabad, 2003 (153) E.L.T. 178 (Tri.-Del.) (ii)     M/s. Sunrise Structurals & Engg. P. Ltd. v. CCE, Nagpur - 2003 (152) E.L.T. 387 (Tri.-Mumbai) (iii)    M/s. Southern Structura....

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....is to the pre-delivery inspection charges incurred by the dealer during the warranty period. The same does not relate to the pre-inspection conducted by the manufacturer at the behest of their buyer. The issue stands discussed in detail by Commissioner (Appeals), who has followed the precedent decisions of the Tribunal as also Board's circular. We find no infirmity in the said order of the Commissioner (Appeals)." 5. Ld. AR has relied upon Larger Bench judgment in the case of Maruti Suzuki India Ltd. v. CCE, Delhi-III (supra) wherein it has been held that PDI charges are required to be included in the assessable value. However, it is observed from this case law that the issue before the Larger Bench, in the case of Maruti Suzuki Ind....