1991 (9) TMI 176 - Commissioner - Central Excise

Summary

Issues:
- Inclusion of erection and commissioning charges in the assessable value for levy of duty.
- Classification of boilers as immovable property.
- Application of relevant judgments to the case.
- Post-clearance expenses and their impact on duty assessment.

Analysis:
1. Inclusion of Erection and Commissioning Charges: The appeal sought to dispose of an application regarding the inclusion of erection and commissioning charges in the assessable value under Section 35E(4) of the Central Excises and Salt Act, 1944. The applicant argued that these charges should be considered as part of the assessable value for the levy of duty, as the boilers became fully manufactured goods only after being erected at the site. Reference was made to a relevant CEGAT judgment in support of this argument.

2. Classification of Boilers as Immovable Property: The respondents contended that the boilers, being shop-assembled before clearance, did not require further fabrication work at the site, and thus should not be classified as immovable property. They relied on a Supreme Court judgment to support their position. Additionally, they argued that no new commodity came into existence at the site of installation, and therefore, charges related to post-clearance activities should not be included in the assessable value.

3. Application of Relevant Judgments: Both parties referenced various judgments to support their respective positions. The respondents highlighted the differences in their manufacturing process compared to the cases cited by the appellant, emphasizing that the entire boiler with accessories was manufactured in their premises before being supplied to buyers. They relied on a Tribunal decision that aligned more closely with their situation.

4. Post-Clearance Expenses and Duty Assessment: The Collector, in his review order, sought to reverse the Asst. Collector's findings and include installation and commissioning charges in the assessable value based on a CEGAT decision. However, the Collector found that the CEGAT decision was not applicable to the current case. Instead, he determined that duty liability had already been discharged upon clearance of the goods from the factory, and subsequent installation activities did not warrant additional duty assessment. The Collector upheld the respondents' claim for exclusion of such charges from the assessable value, considering them as post-clearance expenses related to the same excisable goods.

In conclusion, the Collector rejected the department's appeal, finding no reason to interfere with the Asst. Collector's order regarding the inclusion of erection and commissioning charges in the assessable value for duty assessment. The judgment emphasized the distinction between pre-clearance manufacturing activities and post-clearance installation expenses, ultimately supporting the respondents' position in this matter.