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Commissioner of Central Excise, Mumbai Versus M/s. Blue Star Limited

2016 (12) TMI 1518 - CESTAT MUMBAI

Valuation - manufacture of Air Conditioners/Refrigeration equipment and supplying the same on self basis at site and undertaking the job of erection and installation of such Air Conditioners/Refrigeration - whether the freight charges to be included in the assessable value? - most appropriate method in the case is Rule 8 - Held that: - On a plain reading of Rule 8 it is clear that the value should be 115% of the cost of manufacture of the product. The provision does not provide to add any elemen .....

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DER Per Ramesh Nair The fact of the case is that the respondent M/s. Blue Star Limited engaged in the manufacture of Air Conditioners/Refrigeration equipment and supplying the same on self basis at site and undertaking the job of erection and installation of such Air Conditioners/Refrigeration. The respondent have adopted the value of the goods in terms of Rule 8 for the reason that the goods cleared to self thereafter it was used for erection and installation. The Revenue proposed to add the fr .....

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nature of supply of the goods by the respondents is not at factory gate sale whereas it is cleared on self basis to the site of the customer. Therefore all the elements incurred from the factory to the site i.e. freight charges is includible in the assessable value. The respondent have undervalued the goods by not including the freight charges in the value. He placed reliance on the judgment in the respondent s own case reported as Blue Star Ltd. Vs. Commissioner of Central Excise, Mumbai-VI 20 .....

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factory gate sale and not otherwise. He also placed reliance on the Board s Circular No. 692/8/2003-CX, dated 13.2.2003. 3. Shri Sourabh Singhania, Ld. Chartered Accountant appearing on behalf of the respondent submits that the respondent have not sold the Air Conditioners/Refrigeration equipment from the factory whereas it was supplied at site on self basis. Therefore at the time of clearance of the goods there is no sale, in such case the respondent have adopted the valuation under Rule 8 of C .....

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spute, we find that the respondent have cleared the goods on self basis to the site of the customer. Since the supply of Air Conditioners/Refrigeration equipments were not sold as such for the reason that the respondent has taken a turnkey project for supply, erection, installation and commissioning. Therefore the sale price of the Air Conditioners/Refrigeration equipment is not separately available, therefore the valuation cannot be done under Section 4((1)(a). In the present case, the value is .....

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