TMI Blog2019 (6) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... ables and Ignition cables , which have a specific use only in the Automobile Industry and are cleared in retail packages affixed with MRP. They do not increase the efficiency of automobiles and therefore, the whole discussion on accessories is incorrectly placed. It is prudent that the goods are to be understood/ evaluated/classified as per the perception and use of the customers. Therefore, the department s contention is correct that the auto cables and battery/ignition cables manufactured and cleared by the Appellants are to be treated as automobile parts If the impugned goods are automobile parts for the purposes of Packaged Commodity Rules, they need not be necessarily classified as same under Central Excise Tariff Act, 1944. We find that auto/battery/ignition cables manufactured by the Appellants are essential parts of automobiles and are covered as parts, components and assemblies of automobiles , under the notification No.11/2006-CE (NT) dated 29.05.2006, 14/2008 CE(NT) dated 01.03.2008 and 14/2008 CE(NT) dated 24.12.2008. Time Limitation - HELD THAT:- It is not open for the department to sit over the RT-12 returns over a period of time and invoke extended period on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to withstand temperatures between 40 degrees to 105 degrees Centigrade to withstand increase in temperature of Automobile Engine and to withstand exposure temperatures; the products is sold to traders in the secondary market in retail packages affixed with MRP and label indicating that the product is to be used in automobiles components in cut-lengths as per requirement after affixing connectors at the ends. It was contended that Auto Cables and Battery/Ignition Cables are and thus such cables are liable for assessment under Section 4A of the Central Excise Act, 1944 being parts of automobile. Show cause Notice dated 29-9-2009 (in respect of Urse Unit) and SCN dated 7-12-2009 In respect of Pimpri Unit) were issued to the appellants, seeking payment of differential duty of ₹ 30,77,116 and 31,30,990 respectively, were issued, under the provisions of Section 11A while proposing to demand interest under Section 11AB; Penalty under 11AC of CEA,1944. Additional Commissioner, vide order in original PI/ADC/39/2010 dated 9-9-2010 PI/JC/47/2010 dated 4-11-2010 confirmed the demand of duty along with interest and imposed equal penalty under the provisions of Section 11AC read with R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.0% In view of the above, only those goods which are parts, components and assemblies of automobiles are specified in the notification issued under Section 4A of the Central Excise Act, 1944 for the purpose of assessment based on MRP. Therefore, the items covered under the above Notification should be part of components of automobiles. 3.2. In this context, it may be relevant to examine the meaning of parts as construed by the Hon ble Supreme Court and Hon ble High Courts in a number of cases. Hon ble Supreme Court, in the case of State of Uttar Pradesh Vs. Kores (India) Ltd. (1976) 4 SCC 477 , held that ribbon is an accessory to a typewriter and not a part of the typewriter, though it might not be possible to type out any matter on the typewriter without the ribbon. Consequently, typewriter, ribbons do not attract tax as per entry 18 of the Second Schedule to the Mysore Sales Tax Act, 1957; this case was followed by the Hon ble Tribunal in the case of CCE Vs Harish Industries 2008 (223) ELT 651 (T); as they are not sold along with the vehicles, auto /battery cables manufactured by the appellants cannot be valued und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of the product is for particular industry/sector, nature of the product does not change. They placed reliance on the following. (i) United Cables Industries Vs CCE 2000 (119) ELT 668 (T) Maintained in Supreme Court at 2002 (141) ELT A280 (SC) (ii) Nicco Corporation Vs CCE 2006 (203) ELT 362 (SC) (Affirmed by Three Bench of Supreme Court at 2008 (225) ELT A131 (SC) (iii) Incab Industries Vs CCE 2001 (137) ELT 574 (T) (iv) CCE Vs Skytone Electricals (India) 2002 (141) ELT 723 (T) Affirmed by Supreme Court at 2008 (225) ELT A97 (SC) (v) CCE Vs Omega Cables Limited 2005 (196) ELT 410 (T) (vi) CCE Vs Alankar Sales Corporation 2003 (151) ELT 317(T) (vii) J.K.Tyre Industries Ltd. Vs CCE 2017(258) ELT 1044 (T) 3.7. Appellants submit that they have maintained all the records and also filed statutory returns from time to time; nature of goods and valuation practices adopted by the appellants were known to the department; records were always available for scrutiny to the department; therefore, demand beyond the normal period of limitation is not maintainable; there is no suppre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; these cables are also sold to automobile dealers only; from the statements of Shri N. Ramanujam, Deputy Manager of Madras Auto Service, Shri Dinakar Krishnarao Joshi, Assistant General Manager (Excise) and Shri S.S. Buva, Assistant General Manager (QC) of the appellants, it is clearly evident that the Auto cables/ Battery cables/Ignition cables are used only in the automobile industry only and not in any other industry; the same fulfill all the requirements as prescribed under the Standards of Weights Measures Act, 1976 the rules made there under and are correctly liable to be assessed under the provisions of Section 4A of the Central Excise Act, 1944. 4.1. Learned AR submits also that the appellants reliance on various cases including that of State of Uttar Pradesh Vs Kores (India) Ltd. (1976)4 SCC 477 , wherein it was held that type writer ribbon is not an essential part of the type writer, but an accessory of the type writer. However, the said judgement is not applicable to the facts of this case, as the Auto Cables/Battery cables/Ignition cables are an essential part of the automobiles, and are specifically covered as parts, components assemblies of aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s etc. and for each type of vehicle has many manufacturers, both Indian as well as Foreign; moreover, there are different models of similar vehicle like whether it is manual/ automatic /semi-automatic; there is a further class of vehicle like diesel/petrol/ CNG; all these different types of automobiles require wiring which differs in length from model to model/make to make etc; it is not possible or feasible for any auto cable manufacturer to sell their product in cut to size form in view of the thousands of various models of automobiles on the road; hence, it is only for the sale of convenience and marketability that the goods are being sold in running length and not because they are industrial goods. 4.4. On the issue of limitation, Learned AR states that the original authority held that the Auto Cables, Battery Cables Ignition cables, are liable for assessment under the provisions of Section 4A of the Central Excise Act, 1944 as they are specifically used in automobiles; the appellants were fully aware of the appropriateness of assessment under Section 4A of the Central Excise Act, 1944, and with an intention to evade payment of duty they have short payment of duty th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cables manufactured by them are in running lengths and can only be used in automobiles only after cutting the same to the required size. The Learned Authorised Representative on the other hand argued that the cables manufactured by the Appellants are tailor made to be used in the automobiles. 5.1. On the issue of the Appellants submissions based on classification we find that the Appellants are trying to mix two different things; classification of goods under Central Excise Tariff Heading and valuation of the same under MRP basis are altogether different propositions. Classification of goods under the particular Heading under Central Excise Tariff is with reference to head note, chapter notes, section notes, general principles of classification and notes to Harmonious System of nomenclature. The goods are subjected to assessment under Section 4A of Central Excise Act, 1944 if they are covered under the MRP regime in terms of Packaged Commodities Rules, 1977. Therefore we don t find that the Appellants contention on the basis of classification are acceptable. 5.2. The Learned Authorised Representative for the Revenue submits that the cables have 0.50, 0.75, 1.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... biles. Only by the reason that they require to be cut in to different lengths before use, they do not cease to be automobile parts. We are in agreement with the contention of the Learned A.R. that in view of the variety of brands of automobiles, models of automobiles and sizes of automobiles, it is anybody understanding that they cannot be a fixed length of these wires. Moreover, it was successfully demonstrated by the Learned A.R on the basis of the product profile of the impugned goods that the goods are meant for automobile industry only. For ease of reference, the product profile advertised by the Appellants is as given below: Finolex Cables Limited offers a range of Auto Cables. These 105 C temperature resistant PVC insulated thin wall automobile cables are designed specially for new generation automobiles. In these automobiles the focus is on miniaturization and optimization of space, which results in increase of temperature in the engine compartments and other locations. The cables with electrolytic grade bare annealed bunched copper conductors are insulate with a PVC compound specially designed and formulated in-house in a wide range of colours including those wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assemblies of automobiles , under the notification No.11/2006-CE (NT) dated 29.05.2006, 14/2008 CE(NT) dated 01.03.2008 and 14/2008 CE(NT) dated 24.12.2008. 5.5. Regarding the issue of limitation, the appellants contend that no evidence has been produced by the department to show that the Appellants have willfully suppressed or mis-stated any fact or acted in a fraudulent manner with an intent to evade payment of duty and therefore extended period cannot be evoked; they further contended that they have maintained all the records and filed the returns from time to time and therefore suppression cannot be invoked. For this reason no interest in penalty are attracted. Learned A.R. submits that the Appellants were selling their products in packaged form by affixing MRP as per Packaged Commodity Rules, 1977; the description on the package indicates that they are for specific use in motor vehicles and not for general use. In spite of the same the Appellants continued to assess the goods under Section 4 and therefore intention to evade payment is evident. We find that the Appellants have been submitting the RT-12 returns regularly; during the period several audits were conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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