TMI Blog2015 (10) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... llant No.1 as per the engineering design by appellant No.2. Keeping in view all these facts, we are of the considered view that the amounts paid to appellant No.2 would form part of the assessable value. We also note that these critical facts were not submitted along with the price declarations and, therefore, the extended period of limitation has been correctly invoked. Revenue has added the engineering design charges for the same reasons. It is immaterial that those engineering and design charges were recovered from Triveni Engg. Pvt. Ltd. initially for the said purpose and later on as damages. It was based upon the engineering designs and drawings supplied by appellant No.2 at the initial stage that appellant No.1 fabricated those equipments. For the reasons which are applicable to the supplies made to EID Parry India Ltd., these amounts will also form part of the assessable value. Here again, the extended period of limitation is correctly invoked and the penalty imposed under Section 11AC is correct. - However, penalty under Rule 173Q is reduced. - Decided partly in favour of assessee. - APPEAL Nos. E/1105 & 1106/05-Mum - Final Order Nos. A/3089-3090/2015-WZB/EB - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by appellant No.2 from Triveni Engg. Works Ltd. will also form part of the assessable value of the goods supplied by appellant No.1 to Vamorganic Chemicals Ltd. The reasoning is exactly similar to the one in the previous case. The case has been adjudicated by the Commissioner vide the impugned order which has been passed in pursuance of this Tribunals order No. A/686, 687/WZB/2004/C-II dated 22.7.2004 with certain directions. Aggrieved by the said order, the appellants are before this Tribunal. 3. Learned counsel for the appellant submitted that the adjudicating authority has failed to consider the directions of the CESTAT. It was submitted that the period involved is before 1.7.2000 i.e. under the old Section 4 and old Central Excise Valuation Rules, 1975. It was submitted that as regards the supplies made by IBI to EID Parry India Ltd., the burden and onus of preparing shop level and operating level drawings and designs of the machines so manufactured and supplied was on IBI and all the elements in connection with manufacturing of the said capital goods are forming part of the assessable value. Appellant No.1 i.e. IBI has not received any amount or any additional consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. vs. CCE reported in 2003 (156) ELT 281 (Tri.-Mum.); (ii) CCE vs. Statfield Systems (Coating) Pvt. Ltd. reported in 1996 (87) ELT 510 (Tri.); (iii) Alfa Laval India Ltd. vs. CCE reported in 1998 (100) ELT 502 (T); (iv) CCE vs. Bharat Forge Ltd. reported in 2000 (122) ELT 169 (T); (v) CCE vs. Luna Agro Industries Pvt. Ltd. reported in 2009 (242) ELT 130 (Tri.-Mum.); (vi) Eastman Crusher Company (P) Ltd. vs. CCE reported in 2008 (224) ELT 86 (Tri.-Kol.). 4.1 It was further submitted that the whole issue pertains to the interpretation of the statutory provisions and there are no grounds to presume or allege that the same was with intention to evade duty and larger period under Section 11A cannot be invoked. It was also submitted that the adjudicating authority has imposed penalty under Rule 173Q for supplies to EID Parry India Ltd. and penalty under Section 11AC for supplies to Vamorganic Chemicals Ltd. There are no grounds to justify heavy penalty on appellant No.1 and, therefore, these penalties should be set aside. 4.2 As far as appellant No.2 is concerned, it was the submission that at the time of first adjudication, the penalty imposed was only ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also required to supervise all the works of appellant No.1 as also erection etc. Such activities of appellant No.2 are related to manufacture of machinery, equipment by appellant No.1. Under these circumstances, the amounts paid to appellant No.2 are required to be added to the assessable value. It was further submitted that these facts were suppressed from the department and were not mentioned in the relevant price declaration etc. and, therefore, extended period of limitation is invokable. 5.1 As far the contract between appellant No.1 and Vamorganic Chemicals Ltd. is concerned, learned AR submitted that the amount paid by Triveni Engg. Works Ltd. to appellant No.2 were exactly for the same purpose. It is immaterial that the said amount was later on forfeited by appellant No.2 as liquidation charges. It was submitted that for the same reasons as in the first case, the amounts recovered will form part of the assessable value. Learned AR further submitted that all the case laws submitted by the learned counsel for the appellant are not relevant to the issue as a perusal of each of these orders would indicate that the charges were relating to erection and commissioning of equip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. In absence of the same the entire amount of ₹ 22 Lakhs attributable to process as per billing schedule is to be included in the assessable value. 2 MECHANICAL EQUIPMENT As per pars D, D.I of annexure 1BIC-V mechanical equipment, engineering equipment includes equipment description, working conditions, design 'conditions, materials of construction, insulation requirement, fabrication and design notes, nozzle data number and size, nozzles orientation, general drawings for fabrication equipment for fabricator to make shop drawings, specifications for bought-out items. The assessee also admits that the amount attributed towards these items is includibie in the assessable value ₹ 22 Lakhs, attributed to these items of work is includibie in the assessable value. 3. CIVIL ENGINEERING. I have already discussed the same above. 4. ELECTRICAL. As per para G Annexure IBIC-V electrical equipments includes motor list, single line diagram, motor control center specifications, safety classification of building and rooms, earthing plan and lightning protection, lighting. installation, interlocking block diagrams, with description of the interlockin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n IBIC V referes to machine and equipment for which insulation requirement was part of mechanical engineering. The entire cost of ₹ 3 Lakhs attributed these items of work is therefore, includible in the assessable value. It is further seen from the agreement between M/s. IBIC and M/s. EID that M/s IBIC was also to ensure successful performance guarantee runs for 6 months. In other words M/s. IBIC were to ensure successful performance regarding the goods manufactured by the assessee. M/s. IBEC was also to undertake inspection of the machine and equipment supplied by the assessee during the erection and also to supervise all the work. Also the inspection regarding machinery manufactured by M/s. IBI. All these activities were carried out by IBIC are related to the manufacture of machinery and equipment by the assessee. Further M/s. IBIC also undertook to ensure that the plant equipment supplied by the manufacturer was in conformity with the description, the technical specifications and was in accordance with the agreement. Agreement also shows that M/s IBIC was to ensure that the production capacity of products, yield and other production figures under regular operating con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and assembled by appellant No.1 as per the engineering design by appellant No.2. Keeping in view all these facts, we are of the considered view that the amounts paid to appellant No.2 would form part of the assessable value. We also note that these critical facts were not submitted along with the price declarations and, therefore, the extended period of limitation has been correctly invoked. As far as the demand relating to supplies made to Vamorganic Chemicals Ltd. is concerned, we find that the Revenue has added the engineering design charges for the same reasons. It is immaterial that those engineering and design charges were recovered from Triveni Engg. Pvt. Ltd. initially for the said purpose and later on as damages. It was based upon the engineering designs and drawings supplied by appellant No.2 at the initial stage that appellant No.1 fabricated those equipments. For the reasons which are applicable to the supplies made to EID Parry India Ltd., these amounts will also form part of the assessable value. Here again, the extended period of limitation is correctly invoked and the penalty imposed under Section 11AC is correct. As far as penalty under Rule 173Q on appellant N ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
