Commissioner Of Central Excise, ... vs Sulzer Pumps India Ltd

(Arising out of Order-in-Appeal No. AT/439/Bel/2005 dated 30.6.2006 passed by Commissioner of Central Excise (Appeals), Mumbai-II)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :

CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Commissioner of Central Excise, Belapur Appellant Vs. Sulzer Pumps India Ltd. Respondent

Appearance: Shri H.M. Dixit, Assistant Commissioner (AR), for appellant Shri Sachin Chitnis, Advocate, for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing: 22.9.2015 Date of Decision: 22.9.2015

ORDER NO

Per: P.K. Jain

This is an appeal filed by Revenue. Brief facts of the case are that the respondent assessee is a manufacturer of PD pumps/water pumps etc. Normally such pumps after manufacture are inspected and tested by themselves and sold. However, in some of the cases, their customers insist that such pumps should be inspected by third party before dispatch. In such cases, they get the pumps inspected by the third party. The amounts paid to such third parties are recovered from the customers through debit notes. The case of the Revenue is that the amount pertaining to such debit notes will form part of the assessable value. The appellants contention is that such an inspection is not part of their manufacturing or sale proceeds but is carried out at the instruction of the customer. They are paying for such testing to third party on behalf of such customer and later on raising debit notes for the same amount. The case was adjudicated wherein the original authority confirmed the demand. Aggrieved by the said order, the respondent-assessee filed appeal before the Commissioner (Appeals) who allowed the appeal. The Revenue is in appeal against the said decision of the Commissioner (Appeals). The respondent-assessee has also filed cross objections.

2. The main ground of the appeal of the Revenue is that as per Section 4(3)(d), the value is required to be the transaction value and in these cases, the amount pertaining to the testing will form part of the transaction value and hence the duty is required to be paid on the said amount.

3. We have considered the submissions of both the sides. We find that the issue is already decided by the Larger Bench of this Tribunal in the case of CCE, Raipur vs. Bhaskar Ispat Pvt. Ltd. reported in 2004 (167) ELT 189 (Tri.-LB). We also note that the amount corresponding to the debit notes is nothing but the amount the respondent-assessee has paid to the third party as per the direction of the customer. Thus the said amount has nothing to do with the transaction value.

4. In view of the above position and keeping in view the decision of the Larger Bench in the case of Bhaskar Ispat Pvt. Ltd. (supra), the appeal filed by the Revenue is dismissed. The cross objections are also disposed of in above terms.

(Pronounced in Court)

(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)

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