9911796707
TMI Blog2016 (12) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby the demand of Excise duty have been raised on bought out items. 2. The brief facts are that vide show cause notice dated 28/5/2014, for the period May, 2009 to March, 2014 demand of Rs. 1,96,00,112/- was proposed as it appeared to revenue that the appellant have short paid Excise duty by not paying duty on the bought out items supplied directly to the customers from their separate trading premises, during the course of investigation. On perusal of the purchase orders submitted by one of the client of the appellant, it appeared that the client had been placing orders on the appellant including composite order for supply of control panel along with drive and thereafter its installation, erection and commissioning. It also appeared th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .B.B. as per their orders. The invoice is raised by A.B.B. in their name with customer as consignee. That subsequently a separate commercial invoice is raised by their trading unit to the customer for recovering the payment and the value shown in their commercial invoice is higher than the invoice price of A.B.B. The price variation varies from invoice to invoice. In some cases where the drive have been supplied directly, the same is received by them from the customer for testing purpose. That they are aware of the valuation rules for the purpose of arriving at the transaction value for the purpose of payment of duty on manufactured goods. Though they are expert, they do not undertake erection of control panels. However, on request of a cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Panel at the customer site. Installation is either undertaken by the customer itself or by other third party service provider engaged by the customers. In a few cases the customers engaged the appellant for supervision of the installation or for commissioning. Namely, the appellant undertakes the following three types of transactions: - (a) Pure Manufacturing Sale- where the customer only buys control panels from the appellant which are manufactured by the appellant and where none of the items are traded by the appellant. The appellant pays applicable excise duty and CST/VAT on the control panel. (b) Pure Trading Sale- where the customer buys control panels, drives and bought out items from the appellant where none of the items are manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o check its compatibility with the control panel. After checking compatibility, the drives are separately returned back to the customer. In such cases the control panels are removed on payment of duty without the drive fitted into it. Usually the appellant has its own drives available in their factory premises which are used for carrying out compatibility testing. It is further urged that control panel is a metal enclosure containing various components and display control/monitoring equipment. It is an independent product manufactured by the appellant as well as available in the market. Control Panel has space left in it for fitment of the drive. The drive controls the speed of the motors. Essentially the drives are part of motors, though f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that drive is not part of control panel. In case of B.K.P.L., drive and control panell were both traded by the appellant as control panel was not manufactured by the appellant in that case. Dev Priya Products purchased drives and control panel separately from the appellant. It is further urged that for the goods not manufactured by the appellant and simply traded from their trading division, no excise duty is leviable. It is also not the case of Revenue that the bought out items had entered the factory or the manufacturing premises and under such admitted position, no excise duty is Levi able on the traded goods. It is further urged that the show cause notice was issued on 28/5/2014 for the period May, 2009 to March, 2014, there being no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol panel, subsequent to clearance in order to avoid the payment of Central Excise Duty. Reliance is placed on the ruling in the case of Electronics and Controls Power Systems Private Ltd. Vs. CCE, Bangalore, 2010 (257) ELT 578, wherein it was held that bought out items namely batteries supplied with UPS as optional item, wherein the issue was decided against the assesses. 6. Having considered the rival contentions. We find that it is an admitted case of revenue that the appellant have not brought the bought out items in their factory of manufacture and it is further admitted fact that the control panels are not cleared along with bought out items from the factory of manufacture. Under such circumstances, we hold that there is no applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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