CCE Vs. PUNJAB ALKALIS AND CHEMICALS LTD.

JUDGEMENT

(1.) The issue raised in this appeal at the instance of the Revenue is whether hydraulic testing charges collected by the assessee from its customers has to be included in the assessable value of caustic soda, hydrochloric acid, hydrogen gas, liquid chlorine manufactured by the assessee. Commissioner (Appeals) took the view that in the light of the Board's Circular No. 7/89 -CE dated 7.7.89 such charges are not liable to be added to the assessable value of the products manufactured by the assessee. Aggrieved by above, the Revenue has come up in appeal.

(2.) Respondent is engaged in the manufacture of caustic soda, Hydraulic Acid, Hydrogen Gas, Liquid Chlorine etc. Show cause notice sought to add hydraulic testing charges collected by the assessee from its customers as part of value of goods produced by the assessee. Before filling the gas into tonners hydraulic test is conducted with respect to the tonners. The assessee collected charges from their customers. Revenue contended that hydraulic testing process is an essential part of the manufacturing process/filling of gas and, therefore, testing charges collected from the customers are to be added to the assessable value. The adjudicating authority confirmed the demand of Rs. 1,79,0900 and imposed a penalty of equal amount.

(3.) Commissioner (Appeals) relying on the Board's circular No. 7/89 -CE dated 7.7.89 and the decision of the Supreme Court in Collector of Central Excise, Bombay -III vs. M/s Century Spinning & Mfg. Co. 1997 (94) ELT 16 (SC) took the view that hydraulic testing charges are not includible in the assessable value.