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2016 (6) TMI 1057 - CESTAT NEW DELHI

2016 (6) TMI 1057 - CESTAT NEW DELHI - TMI - Valuation - inclusion of design and engineering charges - receipt of additional consideration in the guise of transportation charges - manufacturers of equipment and machinery item - Held that:- The appellants did the designing and engineering for the civil structure at the premises of M/s. SAIL, BSP where the erection and installation of walking beam cooling bed etc. was done on turnkey project basis. - these design and engineering charges do not per .....

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ide the demand by observing that the same are the activities relatable to erection of plant and machinery at the site of M/s. SAIL. The erection and installation is done out of goods supplied by the assessee as well as by others and which ultimately results into coming into existence of immovable rail mill. - Demand cannot sustain - Decided against the revenue. - Excise Appeal No. 1112 of 2007 - FINAL ORDER NO . 51944 /2016 - Dated:- 3-5-2016 - MS ARCHANA WADHWA, MEMBER (JUDICIAL) AND MR .....

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,73 & 84 of the First Schedule to the Central Excise Tariff Act, 1985. The respondents had entered into a contract as part of consortium comprising others for setting up installation of walking beam, cooling bed etc in the rail and structural mill of M/s. SAIL, BSP, Bhillai. As per the summary price schedule, the following items of work were consigned to the respondents, namely: (i) Designing Engineering Rs .31,00,000/- (ii) Supply of plant and equipments Rs.12,66,05,500/- (iii) Civil Engine .....

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to ₹ 1,25,00,000/-, were also not included in working out the assessable value of the goods manufactured by them. Apart from this, the respondents had also charged and recovered freight and transportation charges of ₹ 11,05,642/- while they had actually paid an amount of ₹ 7,43,522/-. Thus, they have recovered an excess amount of ₹ 3,62,120/- from their customers in the guise of transportation charges which it appeared was includible in the transaction value as defined u .....

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ory penalty under section 11AC of ₹ 25,53,939/- was also imposed on the respondents. 4. Being aggrieved, the respondents preferred an appeal before the Commissioner (Appeals), Raipur. The Commissioner (Appeals), Raipur allowed the appeal of the respondents and set aside the adjudication order of the adjudicating authority. Hence, the present appeal by the Revenue. 5. Revenue has challenged the appeal only on two grounds . First the design engineering and supply of plant and equipment which .....

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the respondents have observed that as part of the contract, the appellants manufactured goods and equipments valued ₹ 12,66,05,500/- and cleared the same from their factory on payment of appropriate duty of excise. These goods were brought to the premises of M/s. SAIL, BSP, Bhilai where the plant and equipment were erected. Apart from this, various civil structures were also erected. The appellants did the designing and engineering for the civil structure at the premises of M/s. SAIL, BSP .....

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plant and equipment manufactured by the appellants in their factory and sold as part of the turnkey project. When that is the case, there is no question of inclusion of such designing and engineering charges in working out the assessable value of the goods manufactured by the appellants. The lower authority erred both on facts and in law in coming to the erroneous conclusion that these charges are liable to be included in working out the assessable value of the goods manufactured by the appellan .....

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