2016 (6) TMI 1057

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....r facts on record, the respondents are manufacturers of equipment and machinery item falling under chapters 72,73 & 84 of the First Schedule to the Central Excise Tariff Act, 1985. The respondents had entered into a contract as part of consortium comprising others for setting up installation of walking beam, cooling bed etc in the rail and structural mill of M/s. SAIL, BSP, Bhillai. As per the summary price schedule, the following items of work were consigned to the respondents, namely:  (i) Designing Engineering Rs .31,00,000/-  (ii) Supply of plant and equipments  Rs.12,66,05,500/-  (iii) Civil Engineering work including supplies  Rs. 8,40,60,000/- (iv) Storage, Handling, Erection, Commissioni....

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....g aggrieved, the respondents preferred an appeal before the Commissioner (Appeals), Raipur. The Commissioner (Appeals), Raipur allowed the appeal of the respondents and set aside the adjudication order of the adjudicating authority. Hence, the present appeal by the Revenue. 5. Revenue has challenged the appeal only on two grounds . First the design engineering and supply of plant and equipment which clearly relate to design and engineering of plant and equipment. The design and engineering is pre manufacturing activity and indispensable for manufacture of the engineering goods and hence cost of design engineering of Rs. 31 lakh received separately from buyer is includible in the transaction value and Central Excise duty of Rs. 4.96,000/-....

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....he erroneous conclusion that these charges are liable to be included in working out the assessable value of the goods manufactured by the appellants. 7. As is seen the appellate authority has relied upon a report from the jurisdictional Central Excise authority that such designing and engineering was not in respect of manufacture of goods to be supplied by the assessee. The same pertain to civil and structural work done at the site. Revenue in their memo of appeal has not referred to said report of the jurisdictional Superintendent and has not sought to rebutt the same. If that be so, we agree with the finding of the Commissioner (Appeals) that such designing and engineering consideration relatable to the site designing cannot be include....