TMI Blog2017 (6) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ed production and clearance of excisable goods - the Department did not have any evidence regarding unaccounted manufacture and clearance, and shifted the burden on the Appellants to prove the absence of such unaccounted clearance. Such course of action is against the basic principle applicable to establish a case of unaccounted clearance resulting in short payment of duty - demand set aside. Short payment of tax - non-inclusion of value of seat covers while discharging duty on Water Closets cleared by the Appellants - extended period of limitation - penalty - Held that: - the item under consideration in the present appeal is seat cover for Water Closets. Admittedly, Water Closets are put to use with seat covers. These are not generic it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal, the Commissioner (Appeals) substantially upheld the original order. 3. In the present appeal, the Appellants are only contesting two main issues on merits. The first one is regarding the confirmation of Central Excise Duty of ₹ 14,01,631/- on account of unaccounted production and clearance of sanitaryware by them. The second issue is relating to short payment of Central Excise Duty of ₹ 17,45,864/- on account of non-inclusion of value of seat covers while discharging duty on Water Closets cleared by the Appellants. They have also contested the invocation of extended period and imposition of penalty on them. 4. The learned counsel for the Appellants submitted that the case of unaccounted manufacture of excisable good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in 2006 (193) ELT A22(SC). Further, reliance was also placed on the decision of the Tribunal in the case of CCE Vs Maharashtra Electronics Corp. Ltd., - 1998 (104) ELT 411 (Tri.). 4.2 Regarding the limitation and penalty, the learned counsel submitted that the Appellants maintained proper records and entered all the transactions. Regarding valuation of Water Closets, even if the duty is payable on the value of seat covers, input credit on the same is available. The reversal of credit has been done by the Appellants before the issuance of the Show Cause Notice and as such no penalty can be imposed. 5. The learned Departmental Representative for the Revenue supported the findings of the lower authorities. He submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance of excisable goods. In spite of the factual clarification, as submitted by the Appellants, regarding the treatment of grade (b) and (c) products, the impugned order recorded the non-entry of such products in RG-I Register forming basis of the case against the Appellants. A perusal of the finding recorded in the impugned order (para 8) clearly indicates that the Department did not have any evidence regarding unaccounted manufacture and clearance, and shifted the burden on the Appellants to prove the absence of such unaccounted clearance. We find that such course of action is against the basic principle applicable to establish a case of unaccounted clearance resulting in short payment of duty. Hence, we find no merit in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught out items is not includible in the assessable value of cistern. These items are not manufactured by the assessee and these are made of various materials like metal, rubber etc. The Tribunal held that, what is manufactured by the assessee is only the cistern which is made of ceramics. Accordingly, it was held that the fittings which are used in the cistern are not to be considered for inclusion of value of cistern. 8. In this connection, we note that the item under consideration in the present appeal is seat cover for Water Closets. Admittedly, Water Closets are put to use with seat covers. These are not generic items and are actually made to the particular specification without which the Water Closets cannot be put to effective oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessable value of the ceiling fan. 9. The Tribunal in the case of Dollar Co. (P) Ltd. Vs Collector of Central Excise, Madras; 1999 (110) ELT 719 (T), has held that Cannula (Nozzle) is to be regarded as part of medicament. The value of Cannula is to be included in the value of medicament. The said decision was affirmed by the Hon ble Supreme Court in 2002 (143) ELT A268 (SC). What is required to be noted is the nature and characteristic of bought out items and its functional necessity when cleared along with a manufactured excisable item. These seat covers are specific to the particular model of Water Closets and are essential requirement in the functional Water Closets. Following the ratio adopted by the Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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