TMI Blog2016 (12) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDICIAL) And MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri Puneet Bansal Shri Prateek Jain, Advocates for the appellant Shri Chatru Singh, Asstt. Commr. (A.R.) for the Department Per Mr. Anil Choudhary : The appellants are manufacturer of control panels (automation solutions), are in appeal against Order-in-Original passed by Commissioner of Central Excise, Noida 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 ₹ 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 that the appellant is supplying control panel to their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated and the proposed demand confirmed holding that the value of drives and other bought out items shown as sold to their customers against commercial invoices, through their trading unit is liable to be added to the value of control panels manufactured by the appellant in terms of Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The interest was also demanded and further penalty was imposed of equal amount. The amount of pre-deposit made during investigation and enquiry of ₹ 50, 47,000/- was appropriated. Further a penalty of ₹ 20 lakhs was imposed on the Director of the appellant, Shri Dinesh Kumar Bhardwaj, the other appellant before this Tribunal. 3. The learned counsel for the appellant Mr. Puneet Bansal appearing along with Mr. Prateek Jain have urged that the appellant is a provider of automation solutions for monitoring or controlling machines or process lines in manufacturing units like paper, sugar etc. They only manufacture the control panel. The other items required namely drive, computer, printer, C.C.T.V. camera etc. etc. are all bought out items which are supplied either by the third party manufacturers or f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 fitted inside the control panel at the customer s site. The drive being distinct item cannot be treated as an essential part of the control panel. Other bought out items required by the customer for setting up automation have no connection with the control panel, as such. Further the drive and other bought out items are optional traded items which are supplied by the appellant to customers based on their request. It is further evident that during the period of dispute, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of manufactured goods. There being no such finding in the appellant's case, the application of said rule is misconceived and bad. It is further urged that there is no allegation of clearance of the bought out items from the factory and for this reason also the demand is fit to be set aside. 5. The learned D.R. for Revenue relied on the impugned order. It is further urged by learned D.R. that the control panels supplied by the appellant cannot work without bought out items namely drive, which is installed in the control panel, post clearance. Further, the control panels are designed to suit the requirement of the drive and without the drive, the control panel is incomplete and cannot function. As such, the impugned order is fit to be upheld. The appellant have managed their affairs in such a manner of fitting the drives in its manufactured goods namely control 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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