Full Judgment
RITES on behalf of Indian Railways are to be included in the assessable value of the Railway Equipment manufactured by them.
2. Shri J.S. Agrawal, Id. Advocate, submitted that the appellants manufactured railway parts according to the specifications of the Railway Department, that the goods were being inspected by M/s. RITES and the charges paid by Railway to M/s. RITES were not included in the assessable value as the same was not paid by the appellants; that the Tribunal in the case of Escorts Ltd. v. CCE, New Delhi [1999 (107) E.L.T. 48 (T) = 1999 (82) ECR 741 (Tribunal)] has held that inspection charges paid by the Customers, the Indian Railways, for inspection of railway equipment are not includable in their assessable value. He, further mentioned that the Tribunal in the past, also in the case of Shree Pipes Ltd. v. CCE [1992 (59) E.L.T. 462] has held that the value of inspection charges for inspecting the goods manufactured by the appellants at the instance of customer was not to be included in the assessable value; that this decision has been upheld by the Supreme Court as reported in 1992 (62) E.L.T. A 51. Reliance was also placed on the decision in the case of CIMMCO Ltd. v. CCE [1994 (74) E.L.T. 687], appeal against which has also been dismissed by the Supreme Court as reported in 1996 (84) E.L.T. A167.
3. Countering the submissions, Ms. Neeta Lal Butalia, learned SDR, submitted that all the expenses incurred upto to a point of clearances of goods are to be included in the assessable value; that the inspection charges, therefore, have to be added in the value of the goods, that in the instant matter the entire goods are supplied by the appellants to the railways and before the inspection, the goods have not reached the marketable stage; that the ratio of the decision in the case of Shree Pipes Ltd. v. CCE [1992 (59) E.L.T. 462] is not applicable to the facts of the present matter inasmuch as in that decision the goods were sold also without testing to other wholesale dealers and only Public Health Electric Department were getting the goods inspected on their behalf by DGS&D; that in the present matter, the entire consignment is supplied to the Railways and as such the ratio of that decisions is not applicable. Finally, she relied upon the decision in the case of Hindustan Gas & Industries Ltd. v. CCE, Baroda [2001 (133) E.L.T. 481] wherein it was held that in a case where every buyer insists upon inspection by a testing agency, the goods couldn't be sold till that inspection takes place. The cost incurred for such testing was, therefore, held to form part of the value.
4. We have considered the submissions of both the sides. A perusal of the decisions relied upon by the Id. Advocate reveal that the goods were sold by the assessee in those cases after the quality control by their own Quality Control Department. In the case of Shree Pipes Ltd., the goods were inspected by the assessees own quality control department and were being certified by the ISI. Similarly in the case of C/MMCO Ltd., the assessee therein had a full-fledged quality assurance department. Again in the case of Escorts Ltd., the Tribunal duly observed that the appellants therein had their own testing facilities and after the manufacture of the goods, the same were tested by them, which gave the product its marketability. In view of these facts, the cost of Test conducted by the Customers on his own was held not to be in-cludible in the assessable value. This aspect is not clear from the facts and material produced on record as to whether the appellants in the present mat- ter have their own testing facility or not. In absence of this vital information, decision cannot be arrived at as to whether the testing charges paid by the Customers are to be included in the assessable value. Accordingly, we remand the matter to the adjudicating authority to ascertain this relevant factual position before readjudicating the matter. We therefore allow the appeal by way of remand.