M/s. Weigh India Plot No. 137,

Functional Industrial Estate, Patparganj,

Delhi-92

Present for the Applicant : Sh. Kailash Hari,

Present for the Department : Sh. G.D. Grover, DR.

The above named applicant had filed an application u/s 84 to the Delhi Value Added Tax Act, 2004 before this court on 24-04-2007 to determine the following question:-

"Whether the applicant should charge Sales Tax/VAT on calibration charges charged by NPL which has already charged service tax on it?"

2. The aforesaid application was disposed of vide order no. 160/CDVAT/2007/148 dated 16-08-2007 which is below:-

"I have perused in detail the application filed u/s 84 of the DVAT Act, 2004 and heard both the parties. After going through the material available on record, I am of the considered view that under section 2(zd)(iv) of the said Act the sale price means the amount paid or payable as valuable consideration for any sale including any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof. It is, therefore, held that the calibration charges are correctly being included in the sale invoice and the applicant should continue to charge VAT on calibration charges".

3. On being aggrieved by the aforesaid order the applicant filed a review application dated 24-08-2007 under the provisions of Sub-Section 3 of Section 74B to the Delhi Value Added Tax Act, 2004. His contention is that VAT should not be charged on calibration amount because of no efforts are put by us in regard to calibration of our products. Calibration is fully, wholly and exclusively done by the NPL only which also charged service tax on it thereby we can surely say that calibration is service only and not product liable for VAT.

4. Sh. Kailash Hari who appeared on behalf of the applicant reiterated the grounds taken in the review application. He submitted that impugned order passed by this court needs review as according to the judgments of the Hon'ble Supreme Court of India in the case of Haveli Ram Diwan Chand Vs. Commissioner of Sales Tax that 'Tulai' would be part of delivery charges and where it has been separately charged in respect of each of the sale transactions entered into between the customer and the dealer, it would be exempt from payment of tax. Otherwise it would come within the definitions of purchase price and taxable turnover. And another case of Hon'ble Rajasthan Taxation Tribunal in the case of Commercial Tax Officer special circle III Jaipur Vs. Gemplast Pvt. Ltd. that under the terms of the contract the inspection charges were to be ultimately paid by the purchaser and not by the seller (dealer). They did not form part of sale price. Before and after the inspection, the sale price remained the same. They were rightly not included in the taxable turnover.

5. The counsel of the dealer also submitted that as per the Section 2(a) of The Standards of Weights And Measures Act, 1976 that "Calibration" means all the operations which are necessary for the purpose of determining the values of the errors of a weight or measure and, if necessary, to determine the other metrological properties of such weight or measure, and includes the actual fixing of the positions of the gauge-marks or scale-marks of a weight or measure, or in some cases, of certain principal marks only, in relation to the corresponding values of the quantity to be measured.

6. Section 22 of The Standards of Weights And Measures(Enforcement) Act, 1985 prohibits sale or use of unstamped weight or measures as under- No weight or measure shall be sold, or offered, exposed or possessed for sale, or used or kept for use in any transaction or for industrial production or for protection unless it has been verified and stamped: Provided that nothing in this section shall apply to any weight or measure which has been initially verified and stamped with a special seal referred to in sub-section (3) of section 41 of the Standards Act.

7. The DR on behalf of the Department argued that according to section 2(zd)(iv) of DVAT Act, 2004 the sale price means the amount paid or payable as valuable consideration for any sale including "any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof".

The applicant has been getting his product calibrated from NPL before its sale and before issuing the sale invoice. It is invariably included in the purchase order to the effect that "The necessary NPL's calibration certificate should accompany with the supply". In these circumstances the calibration charges form an essential part of sale. The contention of the counsel for the applicant that the calibration charges realized from the buyer is only the reimbursement of the amount paid by the applicant to the NPL does not hold good as the payment for calibration has been made by the applicant and the amount has been included in the sale invoice naturally making it a part of sale invoice. Hence, it must be added to the sale proceeds and should attract VAT.

8. I have heard argument of both sides and gone through the fresh documents submitted by the applicant. After going through the material available on record, I am of the considered view that under section 2(zd)(iv) of the said Act the sale price means the amount paid or payable as valuable consideration for any sale including any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof. It is, therefore, held that the calibration charges are correctly being included in the sale invoice and the applicant should continue to charge VAT on calibration charges.

The review application is dismissed.

( Archna Arora )

Commissioner, T&T,