2023 (3) TMI 432 - AT - Central Excise

Valuation - collection of charges from customers in the name of consumable charges through debit notes - case of the department is that the said charges are includible in the assessable value of DG sets - HELD 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 & Maintenance which is provided through their sub contractor. There is separate contract for such services. In this fact, the activity of manufacture is completed when the DG set is sold by the appellant from their factory on transaction value. The other activities such as supply of spares for Installation & Commissioning and Repair & Maintenance of DG sets is all together different activity which cannot be clubbed with the assessable value of manufactured DG set sold by the appellant. It is also observed that in the show cause notice the department failed to even corelate the consumable charges raised through debit note with a particular DG set manufactured and sold by them. Therefore, the case of the department cannot be sustained.

This issue is no longer res- integra as the same was decided in the appellant own case reported at M/S. VEENA INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., VAPI [2016 (1) TMI 161 - CESTAT AHMEDABAD] wherein this Tribunal has held that It is an independent activity of service therefore the cost of diesel which was recovered by the appellant from the customer as reimbursement for the testing of the DG set is not includable in the transaction value 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.

The impugned order is set aside - Appeal is allowed.