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2014 (8) TMI 184 - AT - Central ExciseValuation of goods - supply of missiles and other products - Inclusion of documentation expenses, NRE, project management, training and training aids and Hub extension supplied to army - Notification No. 64/95 CE dated 16.03.95 - appellants have claimed that documents supplied are classified under CETH 49.01 and therefore are completely exempted even if they are related to missiles supplied by them - Held that:- Training or training aids cannot be considered as an activity undertaken in relation to sale of goods being valued. This is definitely a post sale activity. Further there is no clear finding as regards the nature of training, place of training, the kind of training etc. According to the counsel, training aids were bought out items. There is no contra finding to this submission. Therefore we have to take a view that this is a post sale activity and unless the missile is ready, produced and ready to fire, there cannot be any training. Therefore we consider that this cannot be included. As regards project management, development for overall coordination activity to be undertaken by the appellant, it is definitely relatable to sale of goods being valued. Therefore it is includible. As regards non recurring expenditure, admittedly this is accepted to be paid to the appellant for research and development and up-gradation of the systems etc. which is definitely related to production of missile and sale of the same. Therefore in our opinion this is also includible. In the absence of exact amount recovered under these heads in detail and the amount of central excise duty payable, the matter has to be remanded to the original authority for quantification of duty payable with interest. Whether the appellant is eligible for the benefit of Sl. No. 3 and 21 in respect of supplies to Navy - Held that:- it would be appropriate to take a view that the appellant is eligible for the benefit especially in view of the fact that the certificate from the officers named in the notification have been produced - all the details are not available to us in view of the secrecy involved which navy would not like to disclose. Therefore conclusions are based on records available and the details available even though they are not to the full requirement. Further we also take a view that in all these cases the Government of India is the consumer and tax is paid by Ministry of Defence that is by the Army and Navy. Extended period could not have been invoked and penalty could not have been imposed in view of the specific provision in the contract itself that taxes and duties would be on the buyer account. Therefore there cannot be any malafide intention to evade tax Government of India being the customer and having agreed to bear the duties and taxes as applicable. Therefore the demand is to be limited to the normal period in the case of supplies to the Army as considered by us above and amounts payable quantified with interest. There can be no question of penalty on the appellant - Decided partly in favour of assessee.
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