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M/s Brew Force Machines Pvt Ltd Versus Commissioner of Central Excise, Delhi-II

2016 (1) TMI 201 - CESTAT NEW DELHI

SSI Exemption - valuation - clandestine removal of goods - allegation on the basis that appellant issued parallel invoices for bought out items and did not include the value of bought out items in the value of manufactured goods. - manufacture of beer/IMFL machinery and storage tanks for storing/processing beer - The appellants defended the notice contending that each tank is made as per requirement of the buyer and cannot be used by another buyer.

Held that:- Apparently the invoices .....

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not sufficient to hold that these are parallel invoices.

The figures in these invoices tally with accounts. Further the department has investigated with the transporters M/s. Doors Transport Ltd. No discrepancy was detected. The allegation that appellant suppressed facts by issuing parallel invoices is factually wrong.

Inclusion of value of bought out items in the Gross Value - Held that:- The bought out items are used for erection/installation of the tank in the buyers p .....

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fore, the case of the department that appellants manufactured complete plant and the bought out items are part of the complete plant manufactured by the appellant is untenable. - the plea of the appellant that bought out items are not part of the excisable goods is acceptable. - Decided in favor of assessee. - Appeal No. E/538/2010-EX(DB) - Final Order No. A/53744/2015-EX(DB) - Dated:- 26-11-2015 - Sulekha Beevi C S, Member (J) And B Ravichandran, Member (T) For the Appellant : Ms Seema Jain, Ad .....

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the appellants were wrongly availing SSI benefit, a search was conducted in the manufacturing premises of the appellant, on 1.6.2004 in the presence of independent witness. The officers verified the stock of finished goods, semi finished goods and raw material and also conducted scrutiny of records. It was observed that appellants had cleared goods valued ₹ 1,71,03,560/- in 2002-03 and goods valued ₹ 1,42,76,801/-during the year 2003-04 and had crossed the limit for availing the ben .....

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such to the buyer. That appellants are not manufacturing or clearing entire plant but only parts of brewing plant (storage tanks) and therefore the value of bought out items ought not to be added to the value of manufactured items. The original authority observed that the value of manufactured items cleared during the relevant period without including the value of bought out items was below one crore and therefore dropped the demand. The department filed appeal before the Commissioner (Appeals) .....

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ctory with the bought out items. After manufacture of this complete plant, the appellants for convenience of transportation dismantled the same after testing and then erected/installed in the premises of the customer. That the bought out items supplied being integral part of the tanks, the value is includible in the transaction value charged by the appellant. It is submitted by the learned counsel that appellants do not manufacture complete brewing plant but only parts of the plant i.e. storage .....

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s, sockets, clamps, temperature gauge etc. are needed. These are either purchased by appellant from open market as bought out items or purchased by buyer himself. The bought out items are either transported by the appellant or some items transported by suppliers directly to the buyer. In all case when bought out items were supplied by appellants, invoices were raised for the amount. That the bought out items are not part of the goods manufactured by appellant and that therefore these value shoul .....

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used by the accountant. All these figures have been properly accounted and reflects in the ER-1 returns. The allegation of issuance of parallel invoices is without basis and that the original authority had dropped the demand after verifying and considering all these facts. 3. The learned DR reiterated the findings of the impugned order. He submitted that the Commissioner (Appeals) has observed that appellants were clearing goods on parallel invoices and has suppressed facts. On taking into accou .....

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to be stated that even though a search was conducted in the manufacturing premises of the appellant; and verification of the stock and scrutiny of records was conducted there is no discrepancy detected with regard to the stock/accounts/figures. The only allegation is that appellant issued parallel invoices for bought out items and if the value of clearances of bought out items is loaded to the value of clearances of finished goods of the appellant, then such total would exceed Rs.One crore and .....

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ttles and the sequence continues upto invoice No.15 dated 29.03.2003 issued to Superior Inds. Ltd., Barely. There is break in sequential number in further dates. Thus apparently the invoices are not issued from same book. The learned counsel has explained this stating that in the cases where bought out items were supplied the invoices in one book was issued and then when manufactured tanks were cleared without bought out items invoices from another book was being issued by the accountant. On che .....

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ually wrong. 7. The main issue that arises for consideration is whether the bought out items supplied by appellants are essential parts of manufactured goods and whether the value of such items is includible in the transaction value of the finished goods. 8. The gist of allegation in the show cause notice is that appellant manufactured the complete brewery plant, using the bought out items, dismantled the same after testing and then transported to the buyers premises from where it was again inst .....

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