TaxTMI 
TaxTMI 
2023 (8) TMI 896
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....ring on behalf of the appellant submits that in a case where special inspection or testing charges incurred by the manufacturer on behalf of the customers on undertaking the third party inspection or testing of their finished goods as instructed by the customers and paid by the manufacturer to the said third party inspector and subsequently recovered from the said customers do not form a part of the assessable value of excisable goods hence, not chargeable to central excise duty in as much as the standard goods produced by the manufacturer were already subjected to normal inspection and testing as per the standards of the manufacturer and to that extent the said testing or inspection charges form a part of the assessable value of the excisable goods which have come into marketable condition but any third party special inspection or testing undertaken by the manufacturer on instruction of the customers and for which the manufacture first pays inspection or testing charges to the said third part inspector or third party inspection agency and subsequently recovered the same from the said customers do not form a part of the assessable value of the excisable goods and hence&....
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....n is though initially paid by the appellant but subsequently and finally incurred by the customer. Therefore, in this fact, in our considered view, the third- party inspection charges cannot be included in the assessable value/ transaction value of the excisable final product i.e. transformers manufactured by the appellant. 4.1 This issue has come up for consideration time and again and in various judgment it was held that in the identical fact the third-party inspection charges for special inspection/ testing on behalf of the customer paid by the manufacturer and recovered from the customer is not includible in the assessable/transaction value of the goods on which such special inspection/ testing was conducted. Some of the decisions are referred below: - * Bhaskar Ispat Pvt Ltd - 2004 (167) ELT 189 (Tri. LB) "3. We have perused the decision of the Tribunal in the case of Hindustan Gas & Industries Ltd. v. Commissioner of Central Excise & Customs, Baroda (supra). In that case the Tribunal had taken into consideration the facts that the inspection charges were not in respect of the optional or secondary testing, hence are includible in the assessabl....
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....inspection carried out at the request of the buyer and for which buyer has to pay, is includible in the assessable value of the goods. As discussed above, as we held that such charges are not includible in the assessable value of the goods. Therefore, we find no merit in this appeal and the same is dismissed." * A. Infrastructures Ltd - 2003 (160) ELT 549 (Tri. Del) "3. We find no merit in this appeal. Respondents are supplying goods manufactured by them to PHED, Rajasthan under a contract, the conditions of which stipulate that inspection fee is to be borne by the Govt. Department and this amount is to be paid initially to the third party Inspection Agency by the manufacturers and subsequently, to be reimbursed by the Govt. Department. As was held by the Commissioner (Appeals) it is not the case of Revenue that respondents have collected extra amount on account of inspection charges or have retained the inspection charges collected from the customers and not paid to the Inspection Agency. This is a case where the third party inspection is carried out at the instance of the buyers and buyers meet the expenses for the same. Merely, because the manufacturers initially pai....
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.... metal, becomes covered with a layer of oxides called scale. As the steel becomes hotter, the thickness of the layer of scale increases, until it begins to fall away to combine with the material of the hearth (if the latter is lined with fire-clay brick); this leads to the formation of so called slag deposit. Part of the scale sticks to the surface of the steel. During the forging process, the oxidation of the steel continues, as the red hot steel is subjected to the action of the surrounding air. Heating thus leads to a certain issue of metal, or the formation of scale due to oxidation of the metal. This loss is called waste, and it is necessary to distinguish between waste due to heating (furnace waste) and waste during forging (forging waste). There exists the widespread opinion that waste occurs mainly during the heating process in the furnace, and that forging waste is insignificant. But investigations have established that the loss of metal due to scale forming outside the furnace is considerable and in some cases is greater than the furnace waste. Waste results in considerable losses in production and leads to a considerable loss of steel together wit....
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....le Apex Court and the Apex Court has dismissed the civil appeal filed by the department, as reported in E.L.T. 1996 page A-167. The Hon'ble Supreme Court had also dismissed the appeal filed by the Collector of Central Excise against order Nos. 209 and 210/95-A, dated 8-3-95 reported in 1996 (85) E.L.T. 58 (T)= 1995 (58) ECR 8 in the case of Hindustan Development Corporation Ltd. v. Collector. The Tribunal had held that expenses incurred on account of additional tests conducted at Customers requisitions are not includible in the assessable value, (iv) in the case of General Engineering Works v. CCE, Jaipur reported in 1996 (81) E.L.T. 569 it was held by the Tribunal that inspection charges paid to RITES by the Railways are not includible in the assessable value. In that case the inspection was done in addition to the regular inspection done by the assessees therein, (v) the Hon'ble Apex Court has dismissed the civil appeal filed by the Collector of Central Excise, against CEGAT order No. 796/91-A, dated 2-12-1991 reported in 1992 (59) E.L.T. 462 in the case of Shree Pipes Ltd. v. CCE. The Tribunal in the said order had held that when inspection and testing are conducted by DGS & D a....