COMMISSIONER OF CENTRAL EXCISE Vs. A. INFRASTRUCTURE LTD.

JUDGEMENT

(1.) At the instance of the Revenue the challenge is against the order passed by the Commissioner (Appeals) dated 30 -10 -2002. The respondents manufacture Asbestos Cement Pipes and supply the same to the Govt. Department as per the specific instructions. Under the Order -in -Qriginal dated 28 -12 -2001 the Assistant Commissioner, Central Excise Division, Bhilwara confirmed the duty of Rs. 1,55,681/ - on the ground that inspection charges recovered by the respondents from their customer were liable to be included in the transaction value of the sold goods. A penalty of Rs. 15,000/ - was also imposed under Rule 173 -Q of the Central Excise Rules, 1944. The period in dispute is between 1 -7 -2000 to 31 -3 -2001 that is after the introduction of the amendment to Section 4 of the Central Excise Act.

(2.) The Order -in -Original was set aside by the Commissioner (Appeals) who held that inspection was done at the behest and on behalf of the customer and the manufacturer remained only as a media through whom such payment was made. Therefore, inspection charges collected by the appellant are not liable to be included in the transaction value. The above finding is under challenge before us in the appeal filed by Revenue.

(3.) We find no merit in this appeal. Respondents are supplying goods manufactured by them to PHED, Rajasthan under a contract the conditions of which stipulate that inspection fee is to be borne by the Govt. Department and this amount is to be paid initially to the third party Inspection Agency by the manufacturers and subsequently, to be reimbursed by the Govt. Department. As was held by the Commissioner (Appeals) it is not the case of Revenue that respondents have collected extra amount on account of inspection charges or have retained the inspection charges collected from the customers and not paid to the Inspection Agency. This is a case where the third party inspection is carried out at the instance of the buyers and buyers meet the expenses for the same. Merely, because the manufacturers initially paid the amount to the inspection agency it will not be a part of the transaction value as the amount is being reimbursed to the manufacturer by the buyer/Govt. Department. We, therefore, confirm the Order impugned and dismiss the appeal.