CA Bimal Jain
Additional amount received as reimbursement towards third party inspection charges undertaken at the instance of the buyer is not includable in the assessable value
Facts:
Central Cables Ltd. (the Appellant) was getting reimbursement of the additional inspection charges incurred at the instance of the buyer in order to meet the standards of ISI. The Department confirmed the demand on the Appellant on ground that inspection charges incurred at the instance of the buyer are to be considered as pre-requisite or pre-delivery inspection charges incurred on the goods which do not become marketable till such inspection is carried out.
Held:
The Hon’ble CESTAT, Mumbai, after discussing the following judicial pronouncements:
- Union of India Vs. Siddharth Tubes Ltd. [2006 (194) ELT 144(MP)];
- CCE, Indore Vs. Grasim Industries Ltd. [2014 (304) ELT 310];
- Commissioner of C. Ex., Ahmedabad-II Vs. Lubi Submersibles Ltd. [2015 (317) ELT 299]
held that the charges which are to be paid to the inspecting authorities is borne by the buyers and not by the Appellant as the amounts paid as third party inspection chargers are reimbursed by the buyers. Thus, the inspection charges received as reimbursement by the Appellant on third party inspection charges at the instance of the buyer is not includable in the assessable value of the products cleared by them.
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if these inspection charges are paid by seller and service tax input has been taken against same , so while raising debit note against same whether the seller shall charge service tax or not ??