TMI Blog2000 (10) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... II/DEM/97, dated 26-11-1997 passed by Commissioner. That order arose out of show cause notices dated 7-12-1995 and 30-1-1996. As per these show cause notices, assessee was called upon to state why Central Excise duty amounting to Rs. 41,08,988.00 short-paid during the period April, 1991 to June, 1994 and Rs. 10,11,806.50 for the period from July, 1994 to February, 1995 should not be realized. Various counts on which duty was stated to have been evaded under the show cause notices were that the assessee did not pay Excise duty on system engineering charges, service charges, deputation charges of engineers, other miscellaneous charges like customer education course, training of participants, annual maintenance contract, etc. and for supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyer and that they were optional items purchased by the buyer. It was also contended that erection and commissioning charges cannot form part of the assessable value. On the ground that no evidence was given by the assessee to prove or deny whether the bought out items enriched the value of the manufactured items contracted and supplied by them, the Commissioner confirmed the demand of Rs. 38,27,384.61 after dropping the demand to the extent of Rs. 14,14,222.26, which was demanded and confirmed by the Assistant Commissioner as per his order No. 17-Demand (206/92) of 1992. The Commissioner also dropped the claim of Rs. 8,17,344.00 on account of installation, erection and commissioning charges. A penalty of Rs. 2 lakhs has also been impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bought out items has been dropped. One has to look in vain to find out which of the bought out items have been included and which of the bought out items have been excluded. In other words, the Commissioner has not mentioned any of the bought out items as an integral part of the goods manufactured by the assessee so that its value should form part of the assessable value. 6. In reply to the show cause notices, the assessee specifically raised a contention that the bought out items, the value of which is sought to be added, were not received in the factory where the goods were manufactured and that they were supplied at the purchaser's premises. The bought out items so supplied were enumerated by the assessee in the appendix attache ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by the assessee to the Commissioner show that they are not essential items. 7. In the present assessee's own case, dealt with by this Tribunal and reported in 1994 (73) E.L.T. 848, an identical issue came up for consideration. The law on the point was stated in paragraph 3 of that order which was pronounced on 24-8-1994. For a proper understanding of the law stated by the Tribunal, we read paragraph 4 : As regards remaining bought out items on going through the aforesaid decisions, we are of the view that the value of such bought out items is includible even if they are not essential for the operation of manufactured goods provided they are fitted or attached to the goods before clearance. If the parts or accessories are fitted at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the said decision in page 7 of the order. Law stated by this Tribunal was not followed by the Commissioner while passing the said order. In these circumstances, we are clear in our mind that the Commissioner was in error in including the value of the bought out items for directing the assessee to pay the differential duty as claimed in the orders. 8. The contract entered into between the assessee was for setting up a Max I System. It was in relation to that system that the computers and other parts were manufactured and duty levied. In the order-in-original No. 10/Commr./KC-II/MP/97, dated 26-11-1997, which is the subject matter of the second appeal, namely, E/774/98-A, the Commissioner did not deal with the system engineering. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r realizing differential duty cannot be sustained. 9. Coming to the appeal at the instance of the Revenue, Supreme Court in PSI Data Systems Ltd. v. Collector of Central Excise reported in 1997 (89) E.L.T. 3, took the view that charges for installation of computer and training of customer's personnel to operate and maintain it are not to be included in the assessable value of the computer. Department was not justified in questioning the correctness of the decision taken by the Commissioner in dropping the claim based on installation, commissioning and testing in view of the decision of the Supreme Court referred to above. 10. In view of what has been stated above, we allow appeal Nos. E/773-774/98-A filed by the assessee and dismiss app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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