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TMI Blog2011 (3) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... r from different manufacturers and selling the same to their customers under one invoice, without bringing any activities on the same, the Revenue has concluded that such sale of various parts of the Computerized Wheel Aligner under one invoice would amount to manufacture of Computerized Wheel Aligner which are classifiable under Chapter heading 90.31 of the first schedule of Central Excise Tariff Act, 1985. Accordingly, duty of Rs. 1,07,89,301/- stands confirmed against the appellant for the period 1999-2001, by invoking the extended period. Penalty of equivalent amount sands imposed on M/s. Neptune Equipment Pvt. Limited under section 11AC of the Central Excise Act,1944 rad with Rule 25 of Central Excise Rules, 2002. Penalty of Rs. 10 Lakhs each stands imposed on Shri M.S. Shah, Director and Shri H.C. Shah, authorized signatory, in terms of Rule 209A of Central Excise Rules, 2002. 3. As per the undisputed facts on record, the appellants are buying following equipments from the market and temporarily storing in their godown situated away from their factory premises :- (a) Personal Computer (PC) loaded with appropriate software with Dot-matrix Printer. (b) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were selling the product as Computerized Wheel Aligner, in their invoices it has to be held that the goods were manufactured by the appellants, classifiable under Chapter 90 and liable to duty. He also draws our attention to the fact that the appellants were earlier importing the Computerized Wheel Aligner and were clearing the same on payment of customs duty. 8. We have considered the submissions from both the sides. For better appreciation we would like to reproduce photographs of five different items and method of their use at the customer s premises, as placed before us. Photographs were photostated in the order in green sheet At this stage, we take note of certificate given by Chartered Engineer for better under standing of the activities undertaken by the appellants, we reproduce the said certificate :- TO WHOMSOEVER IT MAY CONCERN This is to certify that on request of M/s. Neptune Equipment Pvt. Limited, 407 GIDC Estate, Odhav, Ahmedabad, the undersigned had visited one of the workshops at Ahmedabad and inspected the Wheel Alignment of vehicle, on 19th of Nov. 2002. My observations are as under :- The Wheel Alignment Computer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in the workshop are attached. In my opinion, each of the items in question is used cumulatively, without undergoing any manufacturing process whatsoever for rendering service at the workshop. The certificate is issued as per standard engineering practice and without any prejudice. Sd/-x.x.x 19.11.2002 (MAHENDRA V. MEHTA) Chartered Engineer. 9. The above facts as detailed in the certificate are not being disputed by the Revenue. As such, the only question which arises for our consideration is as to whether buying of five different items, dispatching the same to the customer s premises under the cover of one invoice and the use of the same in the customer s premises for checking the alignment of a vehicle would amount to manufacturing activities on the part of the appellant or not. As is seen from the certificate, all the five items required for wheel aligner are brought together in the customer s premises only for checking the vehicle. As soon as the job is done, all the components i.e. sensor, sensor holder, turn table etc. are removed from the vehicle and put back into the corner of the workshop. As per the said certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics and use. All job for delivery of the goods ordered known as Computerized Wheel Aligner were completed by the noticee unit and known as such. Therefore, the contention of the noticee that no process was carried out by them is virtually incorrect and not tenable as they were responsible for warranty and after sale service. 13. We do not find any merits any contention of the Revenue. There is no dispute about the fact that the bought out items were being delivered by the appellants (may be under the cover of one invoices) to their customers. The appellants were also helping the customers in digging the pit and connecting all the parts at site for the wheel aligner. It is also on record in the shape of a Chartered Engineer certificate that such connections are temporary and after the job is done, they are taken out and kept individually in the corner of the workshop. The same are again reconnected at the time of the second job. Merely because the appellants were responsible for warranty and after sale services, by itself cannot be held to be a reason for holding the activities of the appellants as amounting to manufacture. 14. We find that the Tribunal had earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved as under in Para 13 :- 13. Let us apply the above tests to the facts of the? present case. As pointed out in the earlier paragraph, the identity of the items placed in the kit is not changed. They are known in the market as such. There is no transformation in the articles which are placed in the kit. They are marketable as such. Further, no process is also involved except that all the articles are put together in one box. It is true that by placing all these articles in one kit the kit has a distinct name known as `cable jointing kit . However, there is no change in character and use of the articles placed in the kit. In other words, except the test that the articles which are placed in the kit has a distinct name, the other tests have not been satisfied. Therefore, placing different articles in the kit does not amount to manufacture. If once the activity of placing the articles in the kit does not amount to manufacture, the provisions of the Act are not applicable as the levy of excise duty is on the production and manufacture of goods. As is seen from the above, that placing of all the items in one kit, which has a distinct name as Cable Jointing Kit, was held to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red case, there were some of the processes like cutting, tubing with connector, tubing with blood filters, oxygen filters and packing the same in a ready to use condition pack were involved. In spite of that the majority judgment held that no manufacturing is involved. In the present case, we note that no process is being undertaken by the appellant either at their godown or at their factory. It is a case of simpliciter providing of all the components of the wheel aligner to the workshop and to assist the workshop people to use the same by digging a pit and connecting the various items in their premises. As such, we are of the view that as no manufacturing activities takes place at the appellant s end, the confirmation of demand of duty on them is not the legal. The same is accordingly, set aside along with setting aside of confirmation of interest and penalty imposed upon them. 17. At this stage, we may also take note of another contention raised by the appellant on the ground that duty liability has to be addressed in the condition at which the goods were removed from the factory. For the above proposition, reference has been made to various decisions. Particularly in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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