TMI Blog2018 (1) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... rcially known and marketed. The clearances made by the appellant-assessee to the various clients as per their requirement are not any new manufactured product, commercially identifiable as ‘BPL Kit.’ The Revenue did not produce any evidence or did not even assert that these are commercially known and marketed product. The electrical components retained their name, character and use and there is no new commercially identifiable product emerging in the present case. Appeal allowed - decided in favor of appellant. - E/50414, 50446/2016 - A/58605-58606/2017-EX[DB] - Dated:- 28-12-2017 - (Dr) Satish Chandra, President And Mr B.Ravichandran, Member (Technical) For the Appellant : S/Sh Amit Jain, Adv. Rahul Tangri, CA For the Respondent : Shri H.C. Saini, AR ORDER Per: B. Ravichandran Both Revenue and assessee are in appeal against the impugned order dated 27.11.2015 of Principal Commissioner of Central Excise, Delhi-I. The period of dispute is 01.09.2009 to 28.01.2014. 2. The brief facts of the case are that the assessee-appellant is engaged in supply of various bought-out electrical items and accessories to various nodal agencies to provide elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,20,686/-. The appellant assessee contested the demand and submitted various documents and defence opposing the said demand. The case was adjudicated and the original authority dropped the demand for an amount of ₹ 5,22,89,423/-. He confirmed duty demand of ₹ 48,31,263/-. He affirmed the demand for an extended period and imposed a penalty of ₹ 24,15,687/-. Both appellant-assessee and Revenue filed appeals against the said order to the extent it is against the respective parties. 4. The ld Counsel appearing for the appellant-assssee mainly submitted on the following lines: i) while the original authority substantially accepted the submissions of the appellant-assessee regarding their non-liability to Central Excise Duty, still confirmed a duty liability of part of the clearances on the ground that when two items are mounted on the board, the product is classifiable under CETH 85371000. The original authority failed in examining the issue of manufacture before proceeding with the classification. There is no new manufactured item arising out of the process undertaken by the appellant which will amount to manufacture in terms of Section 2(f) of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in loose form for assembling at the site of installation. This aspect has been properly examined in the impugned order. Further, the Revenue relied on the fact that the appellant-assessee got registered themselves under Central Excise Act in December, 2013 and started paying duty on the same goods. The ld Counsels submitted that the appellant-assessee started manufacturing boards and clamps in their unit which was not done earlier. Accordingly, they took registration in December, 2013. This cannot be the reason for demanding excise duty for the period during which the appellant did not involve themselves in any manufacturing activity. 6. The ld AR elaborating the grounds of appeal by the Revenue submitted that the original authority misinterpreted the tariff entry and the general rules for interpretation of tariff. The BPL Kits were cleared in assembled condition. Even if the boards and electric components of the BPL Kit are cleared in loose form for assembling at site of installation, such a clearance when made together shall be classifiable under heading 8536 by virtue of Rule 2(a) of the General Rules for the interpretation of the first schedule to the Central Excise Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find no justification at all to subject such clearances to central excise levy. Goods purchased are in bulk and sold in bulk; the appellant assessee did not undertake any process on such goods. There is no ground to object to the finding recorded by the original authority. 9. Regarding categorization of various clearances made by the appellant- assessee, we find that the same is based on the appellant s trade practice, documents and invoices maintained by the appellant-assessee and there can be no grievance in such categorization. The same is for the purpose of convenience and ease of understanding the dispute in proper perspective. The facts so presented in such categorization by itself will not influence any finding on legal dispute. Further, the Revenue did not present any case of any mis-representation or wrong facts in such submissions for categorization made by the appellant assessee. The original authority has examined these various types of clearances made by the appellant-assessee for a finding. We find no infirmity in such process adopted by the original authority. 10. To levy central excise duty on any goods, the same should have been produced or manufactured in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve no purpose but for the said process. In other words, whether the commodity already in existence will be of no commercial use but for the said process. Referring to their decision in M/s Empire Industries Limited - 1985 (20) ELT 179 (SC), the Apex Court emphasized that in case of transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes, manufacture takes place and liability to duty is attracted. 13. The Hon ble Supreme Court in M/s Servomed Industries (P) Ltd, 2015 (319) ELT 578 (SC) referring to their decision in Rajasthan State Chemical Works, 1991 (55) ELT 444 (SC) held where the goods remained exactly the same even after a particular process, there is obviously no manufacture involved. Even where the goods remained essentially the same after the particular process, there again, manufacture is not involved. When the goods were transformed into something different and new, after a particular process but the same are not marketable, there is no case of manufacture. Where the goods are transformed into a new and different go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat and further affirmed by the Apex Court reported in 2015, ELT A48 (SC). 16. In the present case, the Revenue seeks to classify the product cleared by the appellant-assessee under tariff heading 85371000. We have perused the various types of items in different combinations cleared by the appellant- assessee. Samples were shown at the time of hearing. We note that the appellant-assessee did not undertake any process in the form of assembling the electrical components and accessories which will result in a new identifiable product having a different character or use. The electrical components or switches are mounted on the board before clearance. The goods cleared by the appellant were generically called as BPL Kit. It is apparent that the method of clearance is mandated by the terms of agreement with their clients. There is no standard commercially identifiable item which is available for sale or purchase in the market. In other words, there is no BPL Kit commercially known and marketed. The clearances made by the appellant-assessee to the various clients as per their requirement are not any new manufactured product, commercially identifiable as BPL Kit. 17. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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