Cce Vs. Bhel

Cce vs Bhel

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu Decided Jan 27, 2005

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Citation: sooperkanoon.com/37869
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Judge: A T V.K., P Chacko
Decided On: Jan 27, 2005
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Cce

Respondent

Bhel

Excerpt

.....assessable value. the commissioner (appeals), however, in the impugned order has allowed the appeal filed by the respondents on the ground that the amount of rs. 36,65,000/-was designing and development of the cooling system which respondent had not supplied to their customers. it is the contention of the revenue that development charges are to be included in the assessable value of the goods which have been supplied by them as these form part of the cooling system, she has relied on the decision rendered by the coordinate bench in the case of kirloskar cummins ltd. v. cce, pune wherein it has been held that design and development charges are to be included in the assessable value of excisable goods under section 4 of the central excise act, 1944.3. we have considered the submissions of ld. sdr and perused the records. it is not in dispute that rs. 36.65 lakhs had been realised by the respondents from their customers on account of development charges on liquid cooling system. it is also not in dispute that the cooling motor pump and cold plates, and frequency convertor have been supplied by them which are to be used in the cooling system itself. thus they have supplied the goods after incurring development charges which are to be included in the assessable value of the excisable goods supplied by them. following the ratio of the decision in the case of kirloskar cummins ltd. (supra) we hold that the development charges are includable in the assessable value of the goods. the appeal of the revenue is allowed.

Full Judgment

1. In this appeal, filed by the Revenue, the issue involved is whether development charges are to be included in the assessable value of the goods supplied to DRDL.

2. When the matter was called, no one was present on behalf of the respondents. Shri G. Jagadish Chander, Dy. General Manager (Finance) of the respondents, had requested adjournment of the matter as their Counsel has to attend to some other cases at SRB, Bangalore. We find that that when the appeal came up for hearing on 10.11.2004 the same was adjourned on the request of the Counsel. As this matter pertains to 1991 we do not find any reason to adjourn the hearing this time. We therefore heard ld. SDR and perused the records. The respondents had undertaken to develop and supply liquid cooling system for a cost of Rs. 46.65 lakhs to the Defence Electronics and Research laboratory (DRDL). The respondents thereafter cleared one unit of DC Cooling System declaring the value as Rs. 45,15,000/- but discharged duty liability only on the assessable value of Rs. 8,50,000/- on the ground that they have supplied only cooling motor pump and frequency converter. The Assistant Commissioner confirmed the differential duty taking the amount of Rs. 45,15,000/- as the assessable value. The Commissioner (Appeals), however, in the impugned order has allowed the appeal filed by the respondents on the ground that the amount of Rs. 36,65,000/-was designing and development of the cooling system which respondent had not supplied to their customers. It is the contention of the Revenue that development charges are to be included in the assessable value of the goods which have been supplied by them as these form part of the cooling system, She has relied on the decision rendered by the coordinate Bench in the case of Kirloskar Cummins Ltd. v. CCE, Pune wherein it has been held that design and development charges are to be included in the assessable value of excisable goods under Section 4 of the Central Excise Act, 1944.

3. We have considered the submissions of ld. SDR and perused the records. It is not in dispute that Rs. 36.65 lakhs had been realised by the respondents from their customers on account of development charges on liquid cooling system. It is also not in dispute that the cooling motor pump and cold plates, and frequency convertor have been supplied by them which are to be used in the cooling system itself. Thus they have supplied the goods after incurring development charges which are to be included in the assessable value of the excisable goods supplied by them. Following the ratio of the decision in the case of Kirloskar Cummins Ltd. (supra) we hold that the development charges are includable in the assessable value of the goods. The appeal of the Revenue is allowed.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Tami... Same Parties Cce vs Bhel Same Subject Service Tax Same Judge A T V.K., P Chacko