TMI Blog2019 (3) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... - decided in favor of appellant. - Appeal No. E/60/2009 - FO/75216/2019 - Dated:- 26-2-2019 - SHRI P. K. CHOUDHARY, MEMBER (JUDICIAL) And SHRI V. PADMANABHAN, MEMBER (TECHNICAL) Dr. Samir Chakraborty, Sr. Adv. Shri Abhijit Biswas, Adv. for the Appellant Shri S. Mukhopadhyay, Suptd. (A. R.) for the Revenue ORDER PER CORAM The appeal is against the Order-in-Original No. 10/Kol- VI/Commr./2008 dated 17/11/2008. The impugned order was passed in the denovo proceedings, in compliance with the directions of the Tribunal in Excise Appeal No. 5220/2007 vide Order No. S-206/A- 336/Kol/2008 dated 05/03/2008. The Lower Authority ordered payment of Central Excise Duty amounting to ₹ 53,89,920/- along with interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f certain composite contracts in which separate amounts have been indicated for supply of goods as well as services. In such cases, the appellant discharges Excise Duty only on the component of value attributable to goods. Revenue was of the view that Excise Duty was required to be paid on the composite price of the contract. On these lines, Show Cause Notice dated 09/02/2005 was issued proposing to demand differential duty for the period June to December, 2000. The Adjudicating Authority upheld the demand of duty and the same is challenged in the present proceedings. 2. Heard Dr. Samir Chakaraborty, Ld. Advocate for the appellant along with Shri Abhijit Biswas, Advocate. Revenue is represented by Shri S. Mukhopadhyay, Ld. AR. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply involving sale of the said goods and the activities of rendering the application services are completely independent of each other and providing Application Services has got no nexus or bearing with the sale of the said goods. The Application Services are neither carried out by reason of sale nor in connection with the sale of the said goods. It is also not a precondition of sale of the said goods. They are independent of each other. (iv) In cases of composite contracts, since prices of the goods to be sold and the Application Services to be rendered are also composite, no separate price for the Application Services under the goods are ascertainable. In such cases, the appellants take the entire contractual price as transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant received Service Charges on the basis of Rupees per tone which are nothing but part of the value of the goods supplied by the appellant which have been reserved by the buyers to be released after the supplied goods had been proved to be those ordered by them. He finally submitted that the value on which duty has been paid does not represent the true intrinsic value, since the total value has been split up into material value and service charges and the latter had been excluded from the assessable value for payment of duty. 5. We have heard both sides at length and perused the record. 6. The appellant is a manufacturer of various types of refractory materials. These materials are used in lining the inside of blast furnace, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Application Services and did not include the said charges in the assessable value thereby evaded Central Excise duty. The appellants manufacture Refractory shapes which are used in furnaces. The products are excisable. The manufacturing process is complete in the factory of the appellants. It is not the case of the Department that the manufacturing process of the excisable goods is completed at the site of the customer. On going through the records, we find that in certain cases the appellants have supplied only the goods to the buyers. In other words, it is not obligatory on the part of the buyer to entrust the work of installation Application Services to the appellants. On those cases, there is absolutely no question of adding the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt should be in the form in which the goods are removed and there is no legal sanction for adding the charges incurred in the customer s premises. When the appellant is receiving certain amount for the services rendered in the buyers factory in terms of the service contracts, it cannot be said that these charges are collected in relation to the sale of the goods. Appellants have cited various case laws which are very relevant. Therefore we hold that the application charges separately collected in terms of the service contracts are not includible in the assessable value. There is no evidence to show that the appellants has suppressed the facts with an intention to evade duty. In fact, in respect of composite contract, the appellants had paid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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