TMI Blog1992 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of supply of sugar machinery to M/s. Bidar S.S.K. Ltd., Bidar, Karnataka. They claimed following deductions in the price-lists :- (i) Rs. 1 Lac on account of erection charges in respect of P.L. No. 104/90. (ii) (a) Rs. 2 Lacs on account of supervision over erection and commissioning, and (b) Rs. 30 Lacs on account of design and engineering charges in respect of P.L. No. 105/90. 2. The Superintendent of Central Excise., Walchandnagar Range, issued show cause-cum-demand notice dated 12-3-1991 mentioning, inter alia, that even though M/s. B.A.R.C. and M/s. Bidar S.S.K. Ltd. had agreed to pay the aforesaid amount of Rs. 33 lacs to the appellants, and the price-lists No. 104/90 and 105/90 had been approved provisionally by the Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that advertising expenses, marketing and selling organisation expenses and after-sale services promote the marketability of the article and enter into its value in the trade. The Assistant Collector has observed that the case laws cited by the assessee are not applicable in this case in view of the clear verdict of the Supreme Court in the case of M/s. Bombay Tyre International, and that the charges realised by the appellants in respect of essential nature of services rendered by them would form part of the assessable value. In the light of these findings, he denied the deductions claimed in the price-list Nos. 104/90 and 105/90 and confirmed the demand amounting to Rs. 5,19,750.00. He also imposed penalty of Rs. 5,000/- on the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Collector indicates non-application of mind on his part. According to the appellants/ erection work at site in Bombay and Karnataka is outside the jurisdiction of the Assistant Collector, and, therefore, manufacturing activity at these places was outside his jurisdiction. 5. Shri R.J. Parekh, Advocate and G.V. Khade, Manager, appeared for personal hearing before me on 14-9-1992. During hearing, they reiterated the points mentioned in the appeal petition. In particular, the learned Advocate emphasised that the ratio of the Supreme Court judgment in the Bombay Tyre International case has not been appreciated correctly by the Assistant Collector, and the same has not been properly applied in his order. He mentioned that since, the plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnational case is that only such expenses incurred on account of other factors which have contributed to the value of the goods are includible in the assessable value which can be identified as contributing to the value of the goods till the time of its removal from the factory gate. The Hon ble Supreme Court had, no doubt, held that all such components which pour into the value of the goods and thereby enrich its value and give marketability to the goods, are to be included in the assessable value, but this addition to value has to be limited only to such components which can be identified as adding to the value till the time of removal of the goods from the factory gate. In view of this position, such charges which are of the nature of po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t goods. These services cannot be treated as pertaining to the goods manufactured by appellants. It is observed that the appellants have mentioned in their reply to the show cause notice dated 12-3-1991 issued by the Supdt. of Central Excise, Walchandnagar, that design and engineering charges are towards project/site activities having no connection with manufacturing of the machinery, and hence, they are outside the purview of Central Excise. They had further mentioned that design and engineering charges are for items other than design and engineering on manufacturing of equipments; these charges are in the nature of services and, therefore, they are not includible in the assessable value. I find that this stand of the appellants has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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