9911796707
TMI Blog1999 (10) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of MRF as in 1995 (77) E.L.T. 433 (S.C.). 2. Briefly, the issue concerns determination of assessable value of Automotive Engines manufactured by the respondents in their unit at Chennai. There are two removal patterns of these engines available at the factory gate as follows :- (a) Removal for sale in the spare parts market through wholesale dealers. (b) Removal on stock transfer basis to other manufacturing units of the respondents company at Hosur, Bhandara and Alwar for further use in the manufacture of automotive vehicles which in turn are cleared on payment of duty - i.e. used as original equipment. 3. The department had issued four show cause notices totally covering the period from Feb. 1996 to August 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue has rightly appealed before us against the order-in-appeal impugned which has held that respondents had correctly declared the assessable value on cost construction method under Rule 6(b)(ii) . She reiterates the grounds of appeal in detail. 5. Heard Shri R. Raghavan, ld. Advocate for respondents. He submits that what was cleared was a semi-finished engine because two major components namely Fan assembly and Air filter had not been attached thereto and without these the engine was not in a position to be operated. Further-more, as has been recorded in the order-in-original itself, the alignment for clutch-facing has been done at a later stage when the engine is used by the manufacturing unit which receives it. ld. Advocate submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-in-appeal impugned. That being so, for determination of assessable value, the Revenue would necessarily have to go to Rule 6(b)(ii). This is exactly what respondents have done while declaring the assessable value as they have used the cost construction method provided for in rule 6(b) (ii). Therefore, ld. Advocate submits that there is no error in the assessable value declared by them and there is no short levy of duty. In this regard, he cites the decision in the case of U.P. Twiga Fibreglass Ltd. v. C.C.E., Meerut as in 1999 (33) RLT 4 (CEGAT) wherein it has been held that where there are no sales, the value is to be determined in terms of Rule 6(b) (ii). He also cites the case of CCE v. Taparia Tools Ltd. & Others as in 1999 (34) RLT 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Co. Ltd. v. CCE as in 1996 (86) E.L.T. 538 (T). Therefore, ld. Advocate submits that since the form in which these engines were cleared was different from the form in which the engines were cleared for spare parts market sale, therefore the value of both cannot be held to be comparable value under law. He therefore prays that Revenue appeals may be rejected. 7. We have carefully considered the rival submissions and records of the case. We find that the issue basically boils down to what assessable value should be applied to automotive engines claimed to be cleared in semi-finished condition to respondents' other manufacturing units as original equipment. We find that since there is nothing on record to dispute the such exclusive us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now well settled one, that removals to original equipment manufacturers is to be considered as removals to a separate class of buyers than removals in wholesale trade. Therefore, we find that the position that emerges in the case of these removals is that (a) removals are to separate class of buyers i.e. industrial consumers who used the said item for further manufacture of motor vehicles. There is no dispute on this fact, and (b) these removals are not on sale basis but on stock transfer basis . Therefore, we find that these removals cannot be governed by Section 4(1) (a) there being no sale involved to this class of buyers in any other instances. Hence the fixation of assessable value has to be done under Section 4(1) (b) resorting to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sembly. Further it is also on record that engine as such was not capable of being mated in the automobiles without realignment of the clutch assembly facing by the manufacturing unit which had received it. Therefore, on both these counts, this engine was not identical technically to the engine which was cleared as spare parts as that engine did not require either Air fitlter or Fan assembly or any such clutch facing alignment to be done by the user who purchased them. Therefore, on both these counts, as analysed above, we find that there is substantial force in the arguments of ld. Advocate. 9. In view of aforesaid analysis, we have independently come to the conclusion that the Rule 6 applicable for determination of assessable value ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
