TMI Blog2018 (7) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... is clearly a trading activity on which neither the duty can be demanded nor the value thereof can be included in the value of transmission towers. The very same issue has been considered time and again by various forums such as this Tribunal, High Court and Supreme Court and consistently the bought out items supplied directly at site for erection installation commissioning of excisable manufactured goods the value of bought out items neither can be included in the value of such machine or even leviable to duty independently. Reliance was placed in the case of COLLECTOR OF CENTRAL EXCISE, BARODA VERSUS DODSAL PRIVATE LTD., BARODA [1986 (1) TMI 259 - CEGAT, NEW DELHI], where it was held that the activity would not come under the purview of a manufacture and ‘the transmission towers which were erected at the site from the structural material would be permanent structures and would not admit of the definition or description of the goods. The nuts and bolts supplied directly to the supply of the supplier being out of the part of manufacturing of appellant is not liable for duty - Since the matter is decided on merit, there is no need to address the issue on limitation. Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance on the following judgments: 1. CCE Bangalore V/s Electronics Controls Power systems P. Ltd reported in 2011 (263) ELT 126 (Tri. Bang) 2. Kerala State Electronics Development Corporation Ltd Vs Commissioner of C.Ex. Cochin reported in 2004 (171) ELT 281 (Tri. Bang) 3. Commissioner Vs. Kerala State Electronics Dev Corporation Ltd reported in 2006 (199) E.L.T A130 (S.C) 4. Mihir Engineers (P) Ltd. Vs Collector of CE, Ahmedabad reported in 1999 (107) ELT 756 (Tribunal) 5. Essel Propack Ltd Vs CCE, Mumbai III reported in 20011 (274) ELR 3 (S.C) 6. Greysham Co. Vs CCC, Delhi-I reported on 2014 ELT 129 (Tri. Del) 7. Ericsson India Pvt Ltd Vs CCC Ponidicherry reported in 2007 (212) ELT 198 9Tri. Chennai) 8. Jupiter Enterprises Vs. CCE Ahmedabad0I reported in 2014 (314) ELT 301 (Tri. Ahmd) 9. Silson India Pvt Ltd Vs. CCE, Thane_I reported in 2006 (!($) E.L.T 37 (Tri. Mumbai) 10.Gujarat Ambuja Cement Vs CCE Rajkot reported in 1996 (85) E.L.T 154 (Tribunal) 11.Collector of Central Excise Baroda Vs Dodsal Privat Ltd. Barodar reported in 1987 (28) E.L.T 352 Trinunal 12.Nizam Sugar Factory Vs Collector of CE A P repo0rted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 1993 (65) E.L.T. 447 (Tribunal) 40.Steel Crafts Vs. Collector Of CE, Belgaum reported in 1995 (75) E.L.T 897 (Tribunal) 41.Collector of Central Excise, New Delhi Vs. Eicher Tractors reported in 2001 (127) E.L.T 353 (Tri Mumbai) 3. Shri Amit Kr. Mishra, Ld. Dy. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He also placed reliance on the following judgements: 1. 2013 (292) ELT 353 (Tri- Kol)- BSNL Vs . CCE, Kolkata-III 2. 2005 (182) ELT 336 (Tri Mum)- CCE, Pune-I Vs. Thermax Bobcock Wilcox Ltd. 3. 1988 (38) ELT 566 (SC)- Marne Tulaman Manufacturers P Ltd Vs CCE 4. 2007 (216) ELT 497 (SC)- CCE, Delhi Vs. Frick India Ltd. 4. We have carefully considered the submission made by both the sides and perused the records. We find that the fact is not in dispute that the nuts and bolts are bought out items and the same is not part of the manufacturing activity of the appellant. The said nuts and bolts were not brought into factory of the appellant. Hence the same is not taken part in the activity of manufacturing of transmission towers. The said nuts and bolts were supplied directly from supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d down in those decisions cannot be questioned the facts of the present case are different. The facts are more or less similar to the fact in Aruna Industries case. 4.2. In case of S.A.E. (India) Ltd. (supra), this division of this tribunal held as under In view of the above we hold that the activity carried out by the appellants would not come within the purview of the manufacture and the transmission towers which was erected at the site from the structural material would be permanent structure and would not admit the definition and description of the goods and consequently we hold that the angles in question would be classifiable under Tariff Item 26AA. We order accordingly and allow all the five appeals which relates to the classification. 4.3. In the case of SS engineers vs CCE (ii) Mumbai tribunal order number A/86040/2018 dated 08.08.2018. This following order was passed : We find that the adjudicating authority has ultimately confirmed the demand against Appellant on whole agreement/ contract price by discussing and relying upon one of the Contract of Boiler of 80 TPH. The demand has been made considering the contract price as value of goods. We find fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntled and to be broken up into pieces if it is to be shifted which will lead to losing its identity of any goods. The impugned order has relied upon some instances where some goods were brought from other sugar factory and were used in installation at Appellant s factory. We find that these goods were brought to Appellant unit by d ismantling the system of old sugar plants. However the adjudicating authority failed to appreciate that after dismantling into price s the identity of the goods did not remain as of goods which was recognizable in old sugar factory. It turned into individua l components or goods since they were not in the form of knocked down condition. We are thus of the view that by means of any imagination the agreements under which the goods were supplied by the Appellant or in case where the Appellant themselves erected the plants or their sections cannot be held to be any contract for manufacture of excisable goods. We are unable to comprehend that huge boilers erected on site piece by piece with the Appellant s manufactured goods and bought out goods which become immovable property are excisable goods. It cannot be removed in knocked down condition or semi knocked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other, unless the context otherwise requires. 4.1. Tribunal in the case of Emerson Network Power India P. Ltd. (supra) in a similar circumstance observed as follows: 4. The entire duty demand on bought-out items pertains to installation of air-conditioning machines at site. From the perusal of the list of bought-out items such as floor grills, piping, cabling etc., it would be seen that they are not parts of air-conditioning machines manufactured and cleared, but items required purely at site. Therefore, the appellants are right in contending that the cost of bought-out items cannot be included in the assessable value. Relying on the aforesaid decisions the appeal is allowed. 8. Drawing parallels from the above order we find that there is no reason to demand duty on the bought out goods as the Appellant has not manufactured any goods which are recognizable as excisable goods. Further we find that the same controversy arose in the earlier period and the matter travelled upto the Tribunal. The findings of the Tribunal as recorded in case of S.S. Engineers Vs. CCE, Pu ne III 2008 (221) ELT 54 (TRI) are as under: 3. It is the case of the department that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k with Wear Plate, Side Cap with pins Top Cap with pins, Side Bearing, Top Half of Top Bearing, Bottom Half of Top Bearing. Mill Roller with crown pinion, Trash Beam with bolts, Trash Plates, Scrapper Plate Holder, Scrapper Plate Massecheart Knife Holder with knives, Tail Bar. Service Gangway with staircase and railing. Hydro-pneumatic System Control Panel. Tank with pumps, Pipes filings. Roller Movement Indicator, Hydrolic Accumulator Set of Forced Feed Lubricator with pipe fittings, Set of Juice Troughs under the mills, Square Coupling for Tail Bar, Set of Base Frames for DC Motor of mill, set of Foundation Bolts Anchor Plates. Under Feeder Roller complete with Brackets, Pinions, Donnelly type Chute, Level Sensing Device, DC Drive for Mills, Mill Reversing Arrangement complete in all respect, Slow Speed Gear Box, Gear Box complete with Oil Pump, Spur Gear for 1st motion, Spur Pinions for Mill Gearing, Shaft for 1st motion Gear-2nd motion Pinions, Set of Gear Guards, Pedestal Bearing for Mill Gearing. Base Frames for Mill Gearing complete with foundation Bolts, Turbine complete with Base Frame. Enclosed Reduction Gear Box, Main Auxiliary Panel and Safety Devices, Pressure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 Sugar Elevators Casing, chain, buckets, drive etc. 15 Feeder Table Shafts, Sprockets, Plummer Blocks with bearing drive motor complete with variable speed drive, reduction gear box, starter etc. 16 Juice Sulphiter Juice Sulphiter (with stirrer, drive etc.), S02 recovery tower with chimney. Lime proportionating device, syrup sulphitatio n unit, S02 recovery tower. 17 Condensors Multi-jet condensor for 750 MM diameter (vapour) pipe including tail pipe, Multi-jet condensor for 1100 MM diameter vapour pipe including tail pipe. It is also the case of the department, as seen from the show cause notices and the impugned orders, that the items are huge items encompassing wide area and cannot be transported and installed as such in any other premises but require to be dismantled before transport and installation at any other site. In view of this admitted position, the ratio of the Apex Court in Triveni Engineering Indus. Ltd. v. CCE, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities, was issued, we set aside the demands and penalties and allow both the appeals. The above order of the Tribunal has been upheld by the Hon ble High Court as reported in Commissioner v. S.S. Engineers-2008 (232) E.L.T. A200 (Bom.)]. We find that in the present case also the show cause notices alleged that the Appellant manufactured the same goods as above and duty demand has been made. Applying the above ratio of the Tribunal we are of the view that the demand of duty made against the Appellant on good s erected, installed at site are absolutely not sustainable. We also find from the Miscellaneous application filed by the Appellant that the jurisdictional Commissioner vide noting dt. 11.11.2008 viewed that the value of the bought out items cannot be included in the assessable value of the manufactured goods in view of the fact that the bought put items did not enter into the factory of the Applicant and no credit is being taken of the duty paid on such items. After this noting the Appellant were not issued show cause notice and thus the department itself appreciate d the fact that the duty demand is not sustainable. Even otherwise also we find that if the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has confirmed duty demand on the contract price. However since we have held that the goods which came into existence after using the bought out goods and the Appellant s own manufactured goods has resulted into immovable property i.e whole sugar plant or its part in the form of Power section or other sections, we do not find any reason to demand duty on the same. In case of Ker a la State Electronics Controls Power Systems P. LTD. 2004 (171) ELT 281, the Tribunal held as under: 5. On a careful consideration and perusal of the impugned orders, we notice that the bought out items were independently supplied to the site and they are in the form of junction boxes, signal heads and cables. They are not part of the traffic controller. All these items go to form traffic signal system, which according to the appellant is an immovable property. The authorities below have held that the value of the bought out items is to be added to the assessable value of traffic controller. On a perusal of the judgments cited by the Counsel we find that the value of the bought out items is not required to be added to the duty paid goods cleared by the assessee from their factory. These judgments cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24) ELT 88 (T) = 2007-TIOL-1558-CESTAT-BANG h) BHEL Vs. CCE 2001 (138) ELT 1223 (T) i) Neycer India Ltd. 2005 (192) ELT 620 (T) j) Mahindra Mahindra Ltd. 2015 (321) ELT 513 (T) k) Pace Marketing Specialities Ltd. 2000 (119) ELT 77 (T) I) Jai Hind Oil Mills Co. 1994 (71) ELT 902 (Bom). 3. On the other hand, Shri V. K. Shastri, learned Asstt. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both sides. We find that the Revenue has not disputed the value of ₹ 42 lakhs for each LPG bullets. However, the demand was raised only on inclusion of the value in respect of bought out items and certain activities taken place at the site for erection and installation of the said LPG bullets. We find that all these elements such as bought out items are undisputedly supplied from the supplier to the site. It is not taking part in the manufacture of LPG Bullets. These bought out parts are used only for erection and installation of LPG Bullets at site and other activity at site are also related to erection and installation. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory of manufacture. Under such circumstances, we hold that there is no application of Rule 6 of the Valuation Rules, 2000. We further hold that there is no misdeclaration of the transaction value by the appellant. Under the fact s and circumstances that the appellant have placed the orders on third-party vendors for supply of the bought out items directed to their customers and have paid the applicable sales tax/VAT, the same does not attract levy of excise duty. We also take notice of the fact that in para No. 27.14 of the impugned order the Adjudicating Authority observed as follows: - I find that the bought out items have not been brought to the factory premises and have not been used in the manufacturing of the goods-control panels. The bought out items were directly sent to their customers and being essential and inseparable part of the control panel, they were installed at the site by them. 7. Thus we find that it is an admitted fact that the bought out items have never entered the factory premises of the appellant so as to become part of the manufactured control panel nor the same have been cleared along with the control panels. Accordingly, we allow these appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rate of duty. Explanation. - For the purposes of this notification inputs does not include - (i) packaging materials in respect of which any exemption to the extent of the duty of excise payable on the value of the packaging materials is being availed of for packaging any final products; (ii) packaging materials or containers, the cost of which is not included in the assessable value of the final products under section 4 of the Central Excises and Salt Act, 1944 (1 of 1944). TABLE S.No. Description of inputs Description of final products (1) (2) (3) 1. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, - (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (i) goods classifiable under any heading of Chapter 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no suppression or malafide intention on part of the Appellant. Thus in our above observations and findings on fact as well as on the basis of orders passed by the Tribunal, Hon ble High Court and Hon ble Apex Court supra we do not find any reason to demand duty from the Appellant. We thus hold that the demand and penalty confirmed against the Appellant are not sustainable on multiple count s as discussed above and requires to be set aside. 13. Accordingly the impugned order is set aside and the appeal is allowed with consequential reliefs, if any, in accordance with law. Miscellaneous application is disposed of accordingly. 4.3 The Honourable Supreme Court in the case of Triveni Industries Ltd. dealing with identical issue observed as under : 19. It appears that the aforementioned two cases - Mittal Engineering Works (P) Ltd. and Quality Steel Tubes (P) Ltd. (supra), were not referred to in Sirpur Paper Mills Ltd. s case. Further, in the instant case it is a common ground that a turbo alternator comes into existence only when a steam turbine and alternator with all their accessories are fixed at the site and only then it is known by a name different from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natory Note further contained : Floors, concrete bases, walls, partitions, ceilings, etc., even if specially fitted out to accommodate machines or appliances, should not be regarded as a common base joining such machines or appliances to form a whole. 22. From a perusal of the above Explanatory Notes, it is clear that when generating sets consisting of the generator and its prime base mover are mounted together as one unit on a common base they are classified under the Heading 85.02; in this connection floors, concrete bases, walls, partitions, ceilings etc., even if specially fitted out to accommodate machines or appliances, cannot be regarded as a common base joining such machines or appliances to form a whole. On a combined reading of the Explanatory Notes, extracted above, there can be no difficulty in inferring that installation or erection of turbo alternator on the concrete base specially constructed on the land cannot be treated as a common base and, therefore, it follows that installation or erection of turbo alternator on the platform constructed on the land would be immovable property, as such it cannot be 'excisable goods' falling within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X
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