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2023 (8) TMI 118 - CESTAT CHANDIGARHValuation - non-inclusion of value of certain bought out items in the assessable value of the service equipment system manufactured and cleared by the appellant - demand alongwith interest and penalty - HELD THAT:- Neither the show-cause notice nor the impugned order brings forth anything to contradict the statement - it is found that the impugned order, other than alleging that the appellants have manufactured systems of the service stations, did not go to verify the actual product manufactured; no Panchnama has been drawn to show whether the bought-out items are fitted with the items manufactured by the appellants and cleared; the classification of the excisable goods manufactured by the appellants is also not mentioned. In the absence of this cogent evidence, it cannot be established that the equipment manufactured by the appellant is incomplete and cannot work independently without the bought-out items in question. The show-cause notice or the impugned order do not make it clear as to why only 4 out of 103 bought-out items were considered for inclusion in the assessable value of the systems said to have been manufactured by the appellant; the only reason cited was that the systems as well as the bought-out items were cleared under the same invoice; it is not clear as to how, in such circumstances, other items, than the 4 discussed, are not considered for inclusion. Therefore, there are no evidence has been brought out to prove that the parts supplied as bought-out items by the appellants are integral parts of the equipment manufactured by them. In the instant case, the Department could not prove conclusively that the bought-out items in dispute are integral part of the equipment manufactured; Department did not even prove that the same are fitted into the system, manufactured by the appellants, at least by the use of screwdriver technology. From the statements, of the experts in the field, recorded by the Department, it is clear that the said items are sold together for ease of convenience of the customers rather than the necessity of the functioning of articles manufactured. Therefore, the appellant’s arguments is strong and the demand of Rs.11,78,980/- disputed by the appellants requires to be set aside. The impugned order is modified to the extent of limiting the duty confirmed to Rs.23,50,637/- which stands paid by the appellant along with interest and 25% of the penalty. Hence, the appeal is partly allowed.
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