2023 (3) TMI 432

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....ers in the name of consumable charges through debit notes. These charges were made by the appellant towards supply and use of consumable spares for Installation & Commissioning and Repair & Maintenance of old DG sets. The case of the department is that the said charges are includible in the assessable value of DG sets. Accordingly, a show cause notice was issued to them which was adjudicated vide order in original dated 15.05.2012 wherein the demand of excise duty on the said consumable charges was confirmed along with interest and equal penalty was imposed under section 11 AC of the Central Excise Act, 1944. Aggrieved by the said Order-in Original the appellant filed appeal before the commissioner (Appeals) who concurring the view of the A....

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.... vs. CCE - 1998 (99) ELT 481 (SC) • CCE, Agra vs. Goverdhan Transformer Udyog Pvt. Ltd. - 2015 (37) STR 161 (All.) • Maruti Suzuki India Ltd . vs. CCE, Delhi- III- 2010 (257) ELT 226 (Tri.- LB) • Union of India vs. Rajasthan Spinning & Weaving Mills - 2009 (238) ELT 3 (SC) 3. Shri Rajesh K Agarwal, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that the appellant have 2 separate activities one is manufacture and sale of DG sets on which excise duty is paid on transaction value. The other activity is Installation & Commissioning and Repair....

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....e towards the sale of DG set. The activity of filling of Diesel in the DG Set at the site Company is at most can be considered as pre-delivery inspection charges. 6. On this issue the Hon'ble Supreme Court in the case of TVS Motors Co. Ltd. (Supra) held that the charges for pre- delivery inspection is not includable in the Assessable Value. The Hon'ble Supreme Court over ruled the Larger Bench judgment of Maruti Suzuki India Ltd.(supra) which was relied upon by the revenue. It is also noted that on the activity of installation/commissioning the appellant have paid the Service Tax therefore, the said activity is altogether different from the sale of DG set. For these reasons also the cost of diesel cannot be included in the Transact....

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.... hand, we would like to refer to Circular dated 12- 5-2000 which was issued contemporaneously with the amendment in Section 4. It expressly states that amount should be recovered from the buyer by the assessee-manufacturer and makes the following reading in this behalf : "2.2 Definition of 'transaction value' has also been modified to make it more transparent. Any amount paid by the buyer himself or on his behalf to the assessee by reason of, or in connection with the sale, would form part of the transaction value. Any amount that is charged or recovered from the buyer on account of factors like advertising or publicity, marketing and selling organization expenses, storage and outward handling etc. will also be part of the transact....

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....ue for valuation and assessment purposes. Thus if assessee splits up his pricing system and charges a price for the goods and separately charges for packaging, the packaging charges will also form part of assessable value as it is a charge in connection with production and sale of the goods recovered from the buyer ... 7. It would be seen from the definition of 'transaction value' that any amount which is paid or payable by the buyer to or on behalf of the assessee, on account of the factum of sale of goods, then such amount cannot be claimed to be not part of the transaction value. In other words, if, for example, an assessee recovers advertising charges or publicity charges from his buyers, either at the time of sale of goods or ....

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....ly manufactured goods cleared from the factory to the depot and from there to the customer. It is the submission of the appellant that as regards the newly manufactured card clothing, it is fully manufactured at the factory even though some small quantity is transferred to depot that is only for onward sale as such and on such goods no activity of repair is carried out. The repairing is carried out on the old card clothing where after use by the customer the card clothing got damaged and the same is repaired for which a separate service charge is collected by the appellant. Since the repairing activity is carried out on the old card clothing which also includes the goods initially supplied by some other manufacturer, therefore the said repa....