TMI Blog2014 (8) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... egards 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... training, training aids, non recurring expenditure and project management. Appellant also entered into a contract with Indian Navy {Contract No. 100/DSR/C/05-06/Brahmos systems Dt: 14.11.2005-Extract vide Annex-V}. As per this contract the company has been supplying different types of Supersonic Cruise Missiles, Platform Systems like Fire Control System, Universal Vertical Launching Module, B D Spares to Indian Navy. Appellant also agreed to undertake vide the said contract, Project Management for 2 ships. In respect of supplies made to Indian Navy (other than Project Management which is nothing but co-ordination and supervision of various activities) appellant had been availing exemption under Notification No. 64/95 CE dated 16.03.95 vide serial no. 3/21 based on Excise Duty Exemption Certificates issued by the competent authority specified in the Notification. 2.3. Taking a view that appellant should have paid central excise duty on documentation expenses, NRE, project management, training and training aids and Hub extension supplied to army, proceedings have been initiated. In the case of supplies to navy, Revenue took a stand that the appellant is not eligible for the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t delivery of any excisable goods, no notional interest on such advance shall be added to the value unless the Central Excise Officer has evidence to the effect that the advance received has influenced the fixation of the price of the goods by way of charging a lesser price from or by offering a special discount to the buyer who has made the advance deposit. Illustration 1.- X, an assessee, sells his goods to Y against full advance payment at ₹ 100 per piece. However, X also sells such goods to Z without any advance payment at the same price of ₹ 100 per piece. No notional interest on the advance received by X is includible in the transaction value. Illustration 2.- A, an assessee, manufactures and supplies certain goods as per design and specification furnished by B at a price of ₹ 10 lakhs. A takes 50% of the price as advance against these goods and there is no sale of such goods to any other buyer. There is no evidence available with the Central Excise Officer that the notional interest on such advance has resulted in lowering of the prices. Thus, no notional interest on the advance received shall be added to the transaction value. He submits that onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity 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. 6.2. 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. 6.3. As regards documentation we have held that the cost is includible. 6.4. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere collectively referred to as ship stores . This distinction was subsequently done away with and, thereafter, the facility continued to be extended by use of the expression ship stores for consumption on board a vessel . Thus it is clear that it has all along been the intention of the Government to grant exemption from central excise duty not only to those excisable goods which are used for running or maintenance of the vessels of the Indian Navy but also to those excisable goods which are meant for consumption of the crew members. In view of this the supply of I.C. Engines without payment of duty to a ship of the Indian Navy, under the above notification was in order. 3. Apart from the above considerations, it is observed that the term consumption , in Central Excise merely connotes use . As for example, the expression clearance for home consumption , merely means clearance for use within the country . Thus stores for consumption, on board a vessel would cover stores, both consumable and non-consumable, meant for the use of a ship as well as the crew members. Reliance can also be placed on the definition of stores appearing in Section 2(38) of the Customs Act, 1962. ..... 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