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TMI Blog2022 (12) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... OM023 TO 03415-16 Dated 11.03.2016 October 2006 to Sep 2012 12 Pollution Control Equipments 1.2 By the impugned orders following has been held: PUN-EXCUS-001-PR.COM-013 TO 040-15-16 Dated 30.11.2015 "ORDER 33.01 I hold that the Bought Out items in these cases of the Noticee are essential and integral parts of Boilers without which Boiler Designed. Manufactured and Supplied under Contract cannot be functionable and hence value of these Bought Out items/parts procured directly at Boiler assembly site for Erection, Installation & Commissioning of same, totally amounting to Rs. 6924,78,22,485/- (Rupees Six Thousand Nine Hundred Twenty Four Crores, Seventy Eight Lakhs, Twenty Two Thousand, Four Hundred and Eighty Five Only) is includable in the transaction value / assessable value of Boilers, manufactured and supplied by M/s Thermax Babcock & Wilcox Ltd., Chinchwad (Now merged & known as M/s. TL) & M/s Thermax Ltd., Chinchwad for the period covered under 28 SCNs issued against them during July,2000 to March, 2015, as required under Section 4(1)(b) / 4(1)(a) of the Central Excise Act, 1944 read with Rule 6 of the Valuation Rules, 2000, as applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td., Chinchwad (Now merged & known as M/s. TL) & M/s Thermax Ltd., Chinchwad respectively, as detailed in Para 14.06 read with Para 31 of this Notice, against total value of Bought Out items recovered from customers amounting to Rs. 555,29,51,085/- but not included in assessable value of Boilers supplied under turnkey Contracts under the provisions of proviso to sub-Section (1) of Section 11A of CEA, 1944. 33.05 I confirm the total duty demanded in the remaining 26 SCNs issued for the period April, 2004 to September, 2015 amounting of Rs. 781,92,73,542/- ( Rupees;- Seven Hundred Eighty One Crores Ninety Two Lakhs Seventy Three Thousand Five Hundred and Forty Two only) i.e. Rs.34,10,86,464/- + Rs.747,81,87,078/- demands made against M/s Thermax Babcock & Wilcox Ltd., Chinchwad (Now merged & known as M/s. TL) & M/s Thermax Ltd., Chinchwad respectively, as detailed in Para 14.06 read with Para 31 of this Notice, against total value of Bought Out items recovered from customers amounting to Rs. 63,69,48,71,400/- but not included in assessable value of Boilers supplied under turnkey Contracts. but not included in assessable value of Boilers supplied under turnkey Contracts under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 34.00 This order is issued without prejudice to any other action that may be taken against the Noticee under the provisions of the Central Excise Act, 1944/Service Tax provisions and / or the rules made there under and / or any other law for the time being in force." PUN-EXCUS- 002-PR.COM-023 TO 034-15-16 Dated 11.03.2016 "ORDER (i) I hold that the Bought Out items in these cases of the Noticee are essential and integral parts of Pollution Control Equipment without which Pollution Control Equipment Designed, Manufactured and Supplied under Contract cannot be made functional, and hence value of these Bought Out items/parts procured directly at Pollution Control Equipment assembly site for Erection, Installation & Commissioning of same, totally amounting to Rs. 603,29,74,305/- (Rupees Six Hundred Three Crores Twenty Nine Lakhs Seventy Four Thousand, Three Hundred Five Only) is includible in the transaction value / assessable value of Pollution Control Equipment, manufactured and supplied by the Noticee during the period from October 2006 to September 2012 (in respect of all the twelve SCNS under discussion) as per the provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006 to September 2012. (vi) However, I give an option to the Noticee, under Section 11AC(1)(e) of the Central Excise Act, 1944, to pay penalty equivalent to 25% of the total demand of Central Excise duty as determined and confirmed at Sr. No. (iii) above for the period from October 2006 to September 2012), provided the Noticee pays the entire amount of Central Excise duty as determined/confirmed above in Sr. No. (iii) above, along with interest payable thereon as ordered in Sr. (iv) above, as well as, the 25% penalty, within 30 days of the date of the communication of the order. 31. This order is issued without prejudice to any other action that may be taken against the assessee or anybody else under the provisions of the Central Excise Act, 1944 and / or the Rules made there under and / or any other law for the time being in force." PUN-EXCUS-001-PR COMMR-036-16-17 dated 15.12.2016 "ORDER (i) I hold that the Bought Out items in this case of the Noticee are essential and integral parts of Boilers without which Boiler Designed, Manufactured and Supplied under Contract cannot be functionable and hence value of these Bought Out items/parts procured directly at B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Central Excise duty amounting to Rs.46,28,15,422/- (Rupees Forty six crores, twenty eight lakhs, fifteen thousand, four hundred twenty two only), short paid by the Assessee M/s. Thermax Limited in respect of Boilers Designed, Manufactured and Supplied under agreement / contract during the period October 2015 to March 2017 as detailed in Annexure-A to the Statement of Demand, by them under the provisions of Section 11A(1) of the Central Excise Act, 1944 read with Section 11A(10) of the Central Excise Act, 1944; accordingly order for its recovery. b) I confirm the demand of interest on the amount of Central Excise duty confirmed amounting to Rs.46,28,15,422/- as detailed in Para (a) above, at the applicable rates, and order recovery of the same from the Assessee M/s. Thermax Limited; c) I impose Penalty of Rs. 4,62,81,542/- (Rupees Four crores sixty two lakhs eighty one thousand five hundred and forty two only) under the provisions of Section 11AC(1)(a) of the Central Excise Act, 1944 on the Assessee M/s. Thermax Limited; I accordingly order for its recovery. d) However, I give an option to the assessee the Assessee M/s. Thermax Limited, under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s works / site, as per the terms of Purchase Order / Contract. 2.5 However, while determining the transaction value of the excisable goods, these elements were not taken into account, as required under Section 4(1) (a) of the Central Excise Act, 1944 (w.e.f. 01-07-2000) read with Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. 2.6 As per the Section 4(1) (a) of the CEA, 1944, the duty of excise is chargeable on any excisable goods with reference to their value. On each removal of the goods, such value shall, in case, where the goods are sold, for delivery at the time and place of removal, and the appellant and the buyer of the goods are not related and price is the sole consideration for the sale, be the transaction value. Transaction value means the price actually paid or payable for the goods when sold and includes in addition to the amount charged as price, any amount that buyer is liable to pay by reason of, or in connection with the sale. 2.7 During the period from July 2000 to March, 2004, appellant had willfully suppressed the transaction value with an intention to evade duty of the finished goods by not adding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CEA, 1944 read with Rule 6 of the Valuation Rules, 2000 and failed to pay appropriate duty on the same. 2.11 The duty short-paid totally amounting to Rs. 878,26,68,076/- is liable to be recovered from the Noticees along with interest in terms of the provisions of Section 11A(1)/11A(1)(a)/11A read with Section 11AB/11 AA of the CEA, 1944, as applicable during the relevant period. It further appears that by the aforesaid acts of omission & commission, the Noticees have rendered themselves liable for penalty under erstwhile Rule 173Q/25/25(1)(d) of the Central Excise (No.2) Central Excise Rules, 2001/2002, as applicable during the relevant period. 2.12 Following Show Cause-cum-Demand Notices (SCNs) were issued to the appellant SCN Period Duty SCN To TBL Chinchwad 07.04.2005 July 2000 to March 2004 38,46,40,385/- 03.05.2005 April 2004 to Sept 2004 6,92,67,198/- 26.10.2005 Oct 2004 to March 2005 3,04,76,936/- 10.03.2006 April 2005 to Sept 2005 1,88,72,158/- 13.10.2006 Oct 2005 to March 2006 13,51,69,094/- SCN To TL Chinchwad 07.04.2005 July 2000 to March 2004 53,98,98,850/- 03.05.2005 April 2004 to Sept 2004 7,94,00,954/- 26.10.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 4(1)(b)/4(1)(a) of the Central Excise Act, 1944 read with Rule 6 of the Valuation Rules, 2000, as applicable during the relevant period; (ii) Central Excise duty totally amounting to Rs.878,26,68,076/- (Rupees Eight Hundred Seventy Eight Crores, Twenty Six Lakhs, Sixty Eight Thousand, Seventy Six Only), short-paid by them on the said value of spares/essential bought out /parts and charges of Erection & Commissioning should not be demanded and recovered from them, under Section 11A(1)/11A (1) (a) of the Central Excise Act, 1944 as applicable during the relevant period; (iii) Interest should not be demanded and recovered from them, on the amount of duty short-paid by the Noticees, as demanded in para (ii) above, as specified under Section 11AB/11AA of the Central Excise Act, 1944 as applicable during the relevant period; (iv) Penalty should not be imposed upon them under Rule 173Q/25/25 (1)(d) of erstwhile Central Excise Rules, 1944,the Central Excise (No.2) Central Excise Rules, 2001/ 2002, as applicable during the relevant period. 2.14 These show cause notices have been adjudicated by the impugned orders. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; * I.T.I. Equatorial Satcom Ltd. 2001 (136) ELT 156 (T.); * L & T Ltd. - 2006 (195) ELT 116 (T.); * Jeetex Engineering Ltd. - 2001 (130) ELT 801 (T.); * Jupiter Enterprises 2014 (314) ELT 301 (T.) * Pursuant to Order passed by Supreme Court, portion of Tribunal's Order relating to valuation was set aside. In any case, Revenue cannot place reliance on the Tribunal's Order without adjudicating original 3 SCNs remanded by the Supreme Court. Revenue in the original 3 SCNs did not include value of bought out items while computing demand. * Predominantly, decisions have taken a view that value of bought out items is not includible. * S S Engineer 2019-TIOL-1124-CESTAT-MUM * Thermal Systems Pvt. Ltd. 2019 (3) TMI 787-CESTAT HYDERABAD * Cheema Boilers Ltd. Vs. CCE 2018 (362) ELT 268 (T.) * Fuse Base Eltoro Ltd. 2000 (116) ELT 279 (T.) * Radiant Electronics Ltd. 1996 (85) ELT 102 (T.) * Statfield Systems (Coating) Pvt. Ltd. 1996 (87) ELT 510 (T.) * Eicher Tractors 2001 (127) ELT 846 (T.) * Cimmco Birla Ltd. 2003 (156) ELT 1019 (T.) * Goetze (India) Ltd. 2004 (169) ELT 274 (T.) * Miles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to claim cenvat credit of tax paid on bought out items received at site of customer.- MIL India Ltd. 2007 (210) ELT 188 (S.C.). * In any case, cum-duty benefit must be granted. * Meghdoot Gramoudyog Sewa Sansthan 2014 (312) ELT 699 (T) * Hi-Line Pens Ltd. 2017 (5) GSTL 423 (T.) * Samyu Glass Pvt. Ltd. 2017 (6) GSTL 330 (T.) * For first two show cause notices dated 7.4.2005, suppression of facts with intent to evade payment of duty cannot be alleged on part of the appellants. * Imposition of penalty is incorrect. 3.3 Arguing for the revenue learned special counsel while reiterating the findings recorded in the impugned order submits that- * The common issue in these 4 Appeals is whether the value of bought-out items received at the site and used in the erection of boilers are liable to be added to the assessable value of boilers under the Central Excise Act. * Issue has been decided by CESTAT's (2005 (182) ELT 336 (T) in their own case, which was affirmed by the Hon'ble Supreme Court of India (2015 (320 ELT 32 S.C). * Revenue established that the brought-out items are essential for the Erection and Commissioning of the boi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed includes such warranty obligations. It is settled law that warranty charges on the manufactured goods supplied are includible in its accessible value. * The appellant claimed Exemption from duty in terms of Notification No 67 /95-CE. The Order in Original clearly indicate that Bought items are essentially required for the erection, commissioning and installation of the boiler at the site of the customer and without which the boiler cannot be commissioned and hence cannot be functional. The case of the revenue is not centred on the status of the emergent product on the eve of postinstallation and the erection at the site of the customer. The case of the revenue is based on the excisable status of goods manufactured and cleared to the site of erection under the terms and conditions of the turnkey contract agreed upon with the customer. Therefore the above view expressed by the appellant has no relevance and application in the subject matter. * It is settled law that. Design and drawing charges incurred in manufacturing should be included in the accessible value of the finished goods for discharging the Central Excise duty payable thereon, It is revealed in most ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excisable goods, namely boilers in the transaction value of boilers manufactured and supplied by them during this period. Had the department not detected non-payment of Duty by the Appellant, it would have gone unnoticed and caused a huge loss of revenue to the Government exchequer. The delinquency on the part of the Appellant stands proved. They cannot be absolved of their statutory liabilities. * Penalty under Rule 25(1)(d) of Central Excise Rules, 2002 read with Section 11 AC of CEA,1944. * Reliance is placed on the following decisions: * Thermax Bobcock & Wilcox Ltd. - 2005 (182) ELT 336 (T) * Thermax Bobcock & Wilcox Ltd. 2015 (320) ELT 32 (S.C) * Baroda Machinery Manufacturer 1997 (91) ELT 88 (T) * Star Industrial & Textile Enterprises Ltd. 2003 (156) ELT 418 (T) * Lipi Boilers Industries Ltd. 2011 (263) ELT 271 (T) * Thermax Ltd. 2016 (337) ELT 456 (Tri. - Mumbai) * Air Control & Chem. Engg. Co. I td. 1996 (88) ELT 718 (T) * Mittal Engg. Works 2001 (136) ELT 311 (Tri. - Del) * Sirpur Paper Mills Ltd. 1998 (97) ELT 3 (S.C.) * Walchandnagar Industries Ltd. 2014 (311) ELT 274 (Tri. - Mumbai) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of C.Ex. Pune-I Vs.M/s Thermax Babcock & Wilcox Ltd [2005(182)E.L.T. 336(Tri,Mumbai] in para -6(a) of the Order observed as under: "(a) Whether the goods as cleared by the respondent is classifiable as Boilers under sub-heading 8402.10: We observe that the HSN explanatory note at page 1240 under heading 84.02 says that economizers, air pre-heaters, superheaters, de-super-heaters steam receivers, steam accumulators, soot removers, water tube, fire-box walls, and other apparatus of accumulation etc. are auxiliary item supplied along with the Boilers These auxiliary item increase or regulate the output of a Boiler or its efficiency. But the expert, whose opinion the Commissioner took into consideration, opines that economizer, super heater and heat recovery unit are essential parts of a Boiler. This opinion therefore is at variance to that extent with what is stated in the explanatory note referred to above. But we still hold that this variance in opinions expressed, does not alter the fact that the parts of Boilers as cleared by the respondents, do constitute an incomplete Boiler in an unassembled form. The facts as come out clearly indicate that the essential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bought out item performs only ancillary functions and are therefore, in the nature of accessories only. Further, most of these bought out items are required only for fixation of Boiler at the customers site. Thus, these bought out items are not required to make the Boiler/other equipment's functional, the Boiler/other equipment's cleared from the factory of the Noticee are functional even without these bought out items. 18.03 Accordingly, the Noticee submits that as the bought out items are mere accessories of the Boilers/other equipment and are not required to make the Boiler/other equipment functional, the value of the said bought out items cannot be included in the assessable value of the Boilers/other equipment. Reliance is also placed on the following judicial precedents wherein it has been held by the courts that the value bought out items which are directly sent to the site and which are not essential integral parts of the goods manufactured by the manufacturer cannot be included in the assessable value of the goods manufactured and cleared by the manufacturer:-viz, * * Shriram Bearings Ltd. v. CCE (1997 (91) ELT 255] * CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same bought out goods does not arise. d) Bought Out items were neither received in their factory nor have they claimed any CENVAT credit on the said goods. In view of the above circumstances, the Noticee claimed that they were not liable to pay excise duty on the Bought Out items. 18.05 The scrutiny of information supplied by the Noticee reveals the List of common / standard Brought-out items procured & supplied directly to customer and' is reproduced below: Sr. No. Description of Items Function 1 Fabricated steel structural namely columns, beams, supports, Fuel Bunker, Fuel Silos, Fuel tanks, Canopy, Gangway, pipe rack. Considering height and heavy weight of Boiler, these structural are required for mounting Boilers on fabricated platform supported by beams, columns etc. Ladders, railings and staircases are required for movement of technicians. 2 Ducting Required to carry air & gases towards furnace and emit unwanted portion to ESP & chimney. 3 Chimney Required to emit burned gases at required height. 4 Industrial Fans To supply the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id accidental explosions and ensuring industrial safety. As evident from a representative sample of P.O./turnkey Contract say, the Noticee was awarded with a contract of Design, Manufacture, Supply, Install, Erect and Commission of 22 TPH steam generator, it would arrange to manufacture Boiler as per Design and specifications of the turnkey Contract and supply all essential parts in CKD condition to the Boiler assembly site, some from its own factory and others from vendors factory and undertake the Installation and Erection work as agreed upon. After completion of Installation & Erection of Boiler the Noticee would operationalize the Boiler and show to the customer steam generation from it @ 22 Metric Ton of Steam per Hour consistently at the desired pressure as specified in the turnkey Contract agreed upon with its customer and from this date of successful Commissioning it gives the Performance Gurantee of the Boiler for 12 Months .Only after satisfactory operation of Boiler throughout the Guarantee period the customer would release 10% of Retention Money kept for the purpose as last payment towards the total Contract Value agreed upon with the Noticee. 18.07 If these Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the facts and circumstances of the present case and hence they need not be discussed further. 19.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE NOTICEE'S CLAIM THAT IT IS ALREADY SETTLED THAT THE VALUE OF BOUGHT ITEMS DIRECTLY CLEARED TO THE CUSTOMER'S PREMISES FOR THE ERECTION, COMMISSIONING & INSTALLATION OF HEAT PUMP IS NOT INCLUDIBLE IN THE ASSESSABLE VALUE OF HEAT PUMP MANUFACTURED AND CLEARED BY THE NOTICEE, THEREFORE, THE PROCEEDINGS ARE HIT BY RES JUDICATA, IS CORRECT OR OTHERWISE 19.01 It is submitted by the Noticee that the issue whether the value of bought out items cleared directly to the customer's site for Erection, Commissioning & Installation of Heat pump is clearly settled in the Noticee's own cases as the Revenue has accepted the decision of Commissioner (A) and has not contended the same before the higher authorities. Therefore, the Department cannot now allege that the value of bought out items is to be included in the assessable value of the Heat pump as the said proceedings are hit by the principle of res judicata. Thus, it is submitted that once a list is set at rest by a decision which has attained f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f value of lithium bromide in the assessable value of Heat Pump. The Hon'ble Tribunal vide Final Order No. A/3537/09/EB/C-II dated 22.01.2009 held that the value of the bought out items (Lithium Bromide) is not includible in the value of the complete machine and the goods cleared from the factory of the Noticee are not parts of air-conditioning & refrigerator equipment but complete air-conditioning & refrigerator equipment. 19.05 It is submitted that the Noticee has already filed an appeal before the Supreme Court against the portion of the said order of the CESTAT which is against the Noticee whereby the Tribunal has held that the product in dispute is a refrigerating equipment and not the heat pump. However the issue stands settled that the equipment so cleared by the Noticee is complete in itself and not part of any machine. 19.06 With this back ground the Noticee claims that the issue with respect to inclusion of value of bought out items in the assessable value of Heat pumps cleared from the factory is settled in favour of the them as the Revenue has not contended the same before the higher authorities. In this context it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia) Pvt. Ltd. v. CCE - [1983 ECR 662] * Indian Oil Corporation Ltd. v. CCE-[1987 (27) ELT 482 (T)], * Sidhartha Tubes Ltd. v. CCE - [2000 (115) ELT 32 (SC)] * Union of India v. J.G. Glass Indus. Ltd. - [1998 (97) ELT 5 (SC)] 20.02 It is the case of the Revenue that the Bought Out Goods cleared to assembly site through vendors to be included in the assessable value of Boiler supplied to customers under the terms and conditions of turnkey Contracts agreed upon with its customers. Accordingly Boiler parts cleared in CKD condition from their own factory are rightly assessed to duty as incomplete Boiler in unassembled form. Similarly vendors of the Noticee while clearing the manufactured goods to Boiler assembly site of Noticee's customers have also paid duty as applicable classifying the same under respective headings of individual goods but not as incomplete Boiler in unassembled CKD condition. However, it is noted that these Bought Out items are the Goods required to complement the incomplete Boilers manufactured at the factory of the Noticees and are got manufactured by the Noticees from their vendor manufacturers as per the need of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from deliberate attempt of under valuation of assessable value for evading/avoiding payment of due duty by the Noticee through the novel modus operandi of duty evasion Accordingly the above mentioned case laws sited by the Noticee are distinguishable from the facts of the present cases. 21.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE IS IT RELEVANT THAT THE ACTIVITY OF ERECTION AND COMMISSIONING UNDERTAKEN AT THE CUSTOMER'S SITE AMOUNT TO MANUFACTURE UNDER THE CENTRAL EXCISE LAWS OR OTHERWISE. 21.01 It is stated by the Noticee that Central Excise duty under the Excise Laws can be charged only if an activity amounts to manufacturing under the provisions of the Central Excise Act and in present case, the activity of Erection & Commissioning undertaken at the customer's site does not amount to manufacture under the Excise Laws. It is submitted by the Noticee that the excise duty under the CEA, 1944 is a duty on manufacture therefore in order to impose duty of excise the incident of manufacture must have taken place. The Noticee submits that it enters into a turnkey Contract for manufacture, Erection & Commissioning of the Boiler with the customers. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Boilers manufactured and supplied by them, during the period from July 2000 to March, 2015 as required under Section 4(1)(b)/4(1)(a) of the CEA, 1944 read with Rule 6 of the Valuation Rules, 2000 and failed to pay appropriate duty on the same. The Revenue has not sought to demand and recover duty on the Boiler which comes in to existence at the customer's site. Whereas it has sought to demand and recover duty on the Boiler which is manufactured and cleared in CKD condition as per the terms and conditions of turnkey Contract agreed upon with its customers. The Notice have paid duty on those parts of Boilers manufactured and cleared in CKD condition from their own factory. But they deliberately avoided payment of duty on the other parts of Boilers got manufactured at vendor's end as per the Boiler design approved and agreed to supply under turnkey Contract with the customer, without these parts Boiler cannot be Commissioned. Further in all the subject cases of the Noticces turkey Contracts agreed upon with customers are composite Contracts and the SCOPE OF SUPPLY includes complete design, Engineering, Manufacture and Supply of Boilers as per the required technical specificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to manufacture but if the goods have emerged in an immovable condition, no excise duty can be charged on the same. The Noticee supported their claim by citing the judgment of the Supreme Court in the case of Triveni Engineering Works. Hon'ble Supreme Court in the case of Triveni Engineering & Industries Vs. CCE -[ 2000 (120) ELT 273 (SC)] has held as under; "14. There can be no doubt that if an article is an immovable property, it cannot be termed as "excisable goods" for purposes of the Act. From a combined reading of the definition of 'immovable property' in Section 3 of the Transfer of Property Act, Section 3(25) of the General Clauses Act, it is evident that in an immovable property there is neither mobility nor marketability as understood in the Excise Law...... It is also submitted by the Noticee that this position of law as laid down by Hon'ble Supreme Court has also been accepted by the CBEC Circular dated 15.01.2002. Therefore, if an item has emerged in an immovable condition and the same can be removed only after dis-assembling it into various components, no excise duty can be charged on such item. 22.02 Reliance is also placed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case the contention of the Noticee is not tenable and accordingly the judgments cited and Board's Circular referred etc become distinguished and hence are not in support of Noticee's contention. 23.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE DECISION OF CESTAT IN THE CASE OF CCE VS. SANMAR WEIGHING SYSTEMS LTD.-[2005 (190) ELT 228 (T)] APPLIES TO THE PRESENT CASE. 23.01 The Noticee placed reliance on the decision of the CESTAT in the case of CCE Vs. Sanmar Weighing Systems Ltd. [2005 (190) ELT 228 (T)]. In that case, Sanmar Weighing Systems Ltd. had entered into Contract with their buyers for supply and Installation of electronic weighing system at customer's site. Sanmar manufactured only certain parts of the said weighing system at their factory and other parts were procured and directly supplied to the customers. The Central Excise Department proposed to demand duty on the entire Contract value of the weighing system installed at the site. The Commissioner of Central Excise dropped the demand and on an appeal filed by the Revenue the CESTAT rejected the appeal. The relevant portion of this decision is as under:-& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder No. 58/1/02-CX, dated 151-2002 issued by the Board under Section 37B of the Central Excise Act. After taking into account various decisions of the Tribunal as well as judgments of the Supreme Court including those in the cases of Mittal Engineering (supra) and Sirpur Paper Mills (supra), the Board accepted the legal position that, when the final product was considered as immovable and hence not excisable goods, the same in CKD or unassembled form would also not be dutiable as a whole by applying Rule 2(a) of the Rules of Interpretation of the Central Excise Tariff, though components, inputs and parts, which were specified excisable products, would remain dutiable as such identifiable goods at the time of their clearance from the factory. We find that the impugned order of ld. Commissioner (Appeals) holding the electronic weighing system to be a non-excisable immovable property, while holding the consoles/data processors to be excisable as automatic data processing machines under Heading 84.71, is quite in keeping with the correct view taken by the Board in its order dated 15-1-2002. 3.In the result, the Revenue's appeal stands dismissed. 23.02 The Noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled Design & Drawings (GA and PI Map) it reveals that the bought out items are essentially required for the Erection, Commissioning& Installation of the Boilers at the site of the customer and without which the Boiler cannot be Commissioned and hence cannot be functional. 24.03 As already discussed, the case of the Revenue is not centred on the status of emergent product on the eve of post Installation and Erection at site of the customer. The case of the Revenue is based on the excisable status of the Goods manufactured and cleared to site of Erection under the terms and conditions of the turnkey contract agreed upon with the customer. It is revealed that the Notice issued by the Revenue intends to demand and recover duty on the Boilers before its erection. Therefore the above view expressed by the Noticee has no relevance and application in the subject matter. 25.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE EVEN IF IT IS ASSUMED THAT ERECTION, COMMISSIONING & INSTALLATION OF BOILER/OTHER EQUIPMENT AT THE CUSTOMER'S SITE AMOUNTS TO MANUFACTURE, WHETHER EXCISABILITY OF THE SAME CAN BE DETERMINED BY PUNE-I COMMISSIONERATE: 25.01 The Noticee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Noticee's Company is located within the jurisdiction of Pune-1 Commissionerate and all the 28 SCNS are against the Noticees Pune units only, the adjudication of these Notices will be within the competence and jurisdiction of the Principal Commissioner, Central Excise, Pune-I Commissionerate. The Noticees contention is therefore not acceptable. As regards judgments cited by the Noticee in this regard accordingly need not be dealt with. 26.00 DATA ANALYSIS: 26.01 The following are the scanned copy representative sample of an invoice issued by vendor for supply of Boiler parts to the Noticee but delivered directly at site of assembly of Boilers along with the relevant representative sample of Tax Invoice issued by the Noticee to its customer in respect of supply of the same Boiler parts received through vendors which throw light on the relevant facts of the case. Similarly a representative sample of billing schedule in the already executed turnkey Contract of EID PARRY (INDIA) LTD with the Noticee was taken for case study and its scanned copy is also appended below. < Scanned copies deleted > 26.02 It is revealed that M/s. Thermax Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete Boilers manufactured at the factory of the Noticees and are got manufactured by the Noticees from their vendor manufacturers as per the need of Boiler design agreed to be supplied under a turnkey Contract. So these Bought Out items are essentially tailor made for the 'Boiler' being manufactured at the factory of the Noticee as a part of a turnkey Contract. Further, these Bought Out items are normally cleared to the site of Noticee's customer as instructed by the Noticee. For such clearances, the respective vendor manufacturers prepare covering invoice consigned to the Noticee Companies with instruction to deliver the same at the site of Noticee's customer where the Boiler manufactured under a turkey Contract is being installed and commissioned by the Noticees. The vendor manufacturers are in no way concerned with the customer who has placed the order for Design, Manufacture, Supply, Install and Commission the concerned 'Boiler'. The vendors receive their payments from the Noticees only and never from the customers. The invoice of the vendors accompanying these Bought Out goods to the site of Installation are collected by the site engineers/supervisor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of successful Commissioning of Boiler supplied under turnkey Contract? The scrutiny of Bill-wise break- up of these turnkey Contracts furnished by the Noticee reveals that no separate recovery has been made towards warranty charges. It shows breakup of bills made for supply of factory made parts and parts got manufactured at vendors premise and supplied direct to site of installation. The total value thus arrived in the Bill tallies with the turnkey Contract value agreed for supply of Boiler. It therefore appears that the question on recovery of cost of warranty provided to Boiler supplied under the Contract in the scope of the Noticee should only be answered by the high profit margin loaded on in the Tax Invoice of the Noticee for the so called Bought Out goods used in assembly of final Boiler at site. It is noted that even though Central Excise Duty has been discharged by the vendors at the time of dispatch of goods as yet, the differential value loaded on the same by the Noticee while raising Tax Invoice on its customers has definitely escaped from levy of Central Excise Duty thereon as only reimbursement of Central Excise Duty paid by the vendors is shown therein and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by vendors. Had the goods were routed through Noticees factory, then they would have been eligible to avail and utilize the Cenvat credits of duty paid thereon, but on the differential value invoiced to customers, the Noticee should have paid differential duty in cash. In the facts and circumstances of the case as explained already, if the activity of manufacture to be treated on behalf of Noticee, then the duty paid by vendors is also to be treated as on their behalf and therefore in the interest of fair play and justice the amount equivalent to duty payable/paid on the Bought Out goods sent direct to site so as to facilitate assembly of Boiler, will have to be treated as part discharge of duty liability by the Noticee on par with Cenvat credit of the same which otherwise would have been available for utilization on its receipt in the Noticee's factory premise. Thus it reveals that after such adjustments, a differential duty on the net differential value of Bought Out goods delivered direct to site on behalf of the Noticee remained unpaid as neither the vendors knew about it/considered such additional value recovered on the goods for payment of duty nor the Noticee discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, and Rule 25 of Central Excise Rules, 2002 are invocable in these cases for demanding the Central Excise Duty/CENVAT duty, along with interest and penalty respectively. The goods totally valued Rs. 69,24,78,22,485/- on which due duty has not been discharged is liable for confiscation under the provisions of Rule 25 of Central Excise Rules (no.2)Rules 2001/Rules, 2002 but for its non availability for the same. IX. The Noticee's action of non-inclusion of value of Bought Out Goods which are essential and integral part of Boilers supplied in the assessable value of Boilers Designed, manufactured supplied Installed and Erected at Boiler site of the customer under the terms and conditions of turkey Contract agreed with its customers resulted in deliberate avoidance and evasion of duty due thereon. X. The Noticees are liable for penalty under the provisions of erstwhile Rule 173 Q of Central Excise(no.2) Rules,2001/2002,Rule 25(1) (d) read with Section 11AC of the CEA,1944, for having contravened the provisions of Section 4(1)(a)/4(1)(b) of the CEA, 1944 read with Rule 6 of Central Excise Valuation Rules, 2000. 4.3 In crux we find that the only issue that needs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acity which is used expressly for generating steam under pressure and includes (i) any mounting (valves etc.); (ii) other fittings attached to such vessel; which is wholly or partly under pressure when steam is shut off. Fittings include economizer (if integrated), feed pipe, steam pipe and the valves, since all these are attached to boiler and will work wholly or partly under pressure. Water at very high pressure is fed to the boiler by feed pump. Heat addition takes place in boiler wherein the water is converted into steam. To increase the efficiency, the steam has to be generated at higher pressure and higher temperature, which is done by the Economisers initially. The steam is further heated by Super Heaters and re-heaters to a high temperature ranging upto 540 deg. C or above depending upon the design parameters. Economisers, Superheater, Re-heaters essentially consists of tube bundles whole sole purpose is to heat the steam further to increase its efficiency. To monitor the system more effectively, various instruments are used to measure various parameters like pressure, temperature, flow of the media in various sections of the boiler. Control Systems are used to ens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machine, even if transported as components, must be understood to have been transported as a complete machine. Therefore, levy of duty should be under sub-heading 8402.10 and not sub-heading 8402.90 as claimed by the Revenue. HSN note Part V under Section XVI : "For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine having the features of the complete machine (see Part IV), presented unassembled (see also in this connection the General Explanatory Notes to Chapters 84 and 85). However unassembled components in excess of the numbered required for a complete machine or for an incomplete machine having the characteristics of a complete machine, are classified in their own appropriate heading." 6. Insofar as the particular assessment is concerned, from the report of the expert as extracted above, it is clear that the said expert had suggested that the respondent-assessee should be asked to file separate list of the parts which are essenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods were required for completing the contract of erecting the unit will not in any way make those goods part of goods manufactured and cleared from the appellant's factory. In view of the above, we set aside the order impugned and allow the appeal." Similar view has been expressed by the CESTAT in the case of Greysham & Co [2014 (304) ELT 129 (T-Del)] stating as follows: "3. We have considered the submissions of the learned DR and have perused the records. The undisputed facts are that the appellant manufactured certain Air Brake Equipments and cleared the same from their factory to Integrated Coach Factory, Chennai of the Railways. Pipes and pipe fittings of the Air Brake systems were bought from the outside and supplied separately to the ICF, Chennai and thereafter the goods manufactured and cleared by the appellant along with bought out pipes and pipe fittings were installed in the Railways Coaches as Air Brake Systems. In our view since what had been manufactured and cleared by the appellant was Air Brake Equipment and this is not a case of where bought out items had been brought to the factory for use in the manufacture of the final products, the value of bought out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d only 4 items manufactured by them and remaining items were directly supplied by third party to the customer's at their site against proper invoice. The plants were also erected at the site by assembling the above 4 items and bought out items by assembling by the third party. The appellant has never supplied plant in toto. Therefore, the value of bought out items are not includible in the assessable value as same are neither spare parts nor accessories to the items manufactured by the appellant. The decision of Narne Tulaman Manufacturers Pvt. Ltd. (supra) is not applicable to the facts of this case as in that case the manufactured goods and bought out items were cleared from the factory and the final product assembled from such duty paid items. In that situation, the Hon'ble Supreme Court held weigh bridge are dutiable. The decision of Mahindra & Mahindra (supra) is also not applicable to the facts of this case as in that case Tribunal held that fabrication of steel structures like roof frame and sheds amounts to manufacture whether the same are fabricated at customers place. In the present case Nitrogen/Oxygen Plants were assembled at the customers place i.e. factory of the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that sizing machines to come to existence, various parts are purchased by the appellant from outside and delivered by such sellers directly at the site of assembling. The decisions cited by the ld. Counsel on the preposition which are enumerated in Paragraph 3 are directly on the point and on the question of jurisdiction itself the appeal of the appellant succeeds and the demand of Excise duty raised in respect of sizing machines is liable to be set aside." We are also in agreement with the submission made by the appellant that if the goods as erected at site are held excisable then they will be exempted as per the notification No 67/95-CE. 4.8 Tribunal has in the case of the Appellant [2005 (182) E.L.T. 336 (Tri. - Mumbai)] themselves has held as follows: "6. Heard both sides. (a) Whether the goods as cleared by the respondent is classifiable as boiler under sub-heading 8402.10: We observe that the HSN explanatory note at page 1240 under heading 84.02 says that economizers, air pre-heaters, superheaters, de-super-heaters steam receivers, steam accumulators, soot removers, water tube, fire-box walls, and other apparatus of accumulation etc. are auxiliary item supplied a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems directly received at site, are assembled at site. It is argued that the contract is for erection of a boiler and therefore the value of the bought out item form part of the assessable value. The fact that no processing was done on the bought out items and that no credit is availed is immaterial according to revenue. 8. The respondents argue that the bought out items are in the nature of accessories and not parts of boiler manufactured and supplied by them. Boiler is complete without these bought out items. The respondents relied on CBEC order No. 4/92 issued under Section 37B in this regard and on the decision of the Tribunal in the Shrike Construction Equipments Pvt. Ltd. v. CCE, Pune [1997 (95) E.L.T. 644 (Tribunal)]. 9. We observe that the respondents reliance on the CBEC order cited supra is misplaced. The said order does not relate to the present issue that is whether the value of bought out items is to be added or not. The decision in Shrike Construction Equipments Pvt. Ltd. case does not decide the issue of inclusion of value of bought out items. The Revenues' contention that without these parts a boiler cannot be commissioned appears to be correct. For instance a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Departmental Representative also cites judgment reproduced in 1994 (71) E.L.T. 508 in support of his argument. We find that this was considered by the Tribunal in the cited judgment of A.Z. Electronics and was not adopted. 4. In the Jeetex Engineering Ltd.'s case the Tribunal had mentioned that the price would not be included where the batteries were not supplied from the manufacturer's factory and were directly installed at the Customers premises. Shri Umashankar stated that such distinction was made only on the ground of commercial expediency and that the result was the same where batteries were supplied from the manufacturer's premises or were supplied to the buyers premises from the other source. We find this argument not acceptable since the Tribunal in the earlier cited judgment had made the decision on this ground." It is noted that Presiding Member in the bench which has decided the case of Siemens was same as the Presiding Member in the appellant case referred above. This judgement has been maintained in the Apex Court as reported at [2003 (158) ELT A 74 (SC)]. 4.10 Appellant challenged the order in their case before Hon'ble Supreme Court and disposing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the brought out items in the show cause notice. Commissioner has in the impugned order not recorded any finding in this respect in the impugned order, as to whether any demand was made in the show cause notice in that case or not. Hence we do not find any merits in the sole reliance placed in the impugned order on the said decision of the tribunal and Hon'ble Supreme Court. 4.11 In the case of Appellant Hon'ble Supreme Court has in order as reported at [1998 (99) E.L.T. 481 (S.C.)] held as follows: "8. Shri V. Lakshmikumaran, learned Counsel appearing for the appellants contended that the decision of the Tribunal as also that of the Assistant Collector insofar as they relate to the inclusion of drawing and designing charges in the assessable value of the Boiler are not challenged but the decision relating to the inclusion of erection and commissioning charges in the assessable value of the Boiler installed by the appellants at the customers' site is positively wrong and is liable to be set aside. It is contended by him that before manufacturing the Boiler, the officials of the appellants visit the site at which the Boiler is to be installed and, thereafter, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its ambit structures, erections and installations. That surely would not be in consonance with accepted meaning of excisable goods and its exigibility to duty." 13. In view of the above, the judgment passed by the Assistant Collector as also by the Tribunal that installation and commissioning charges have to be treated as assessable value of the goods supplied by the appellants are not correct and are liable to be set aside. Since we are disposing of these appeals on merits on coming to the conclusion that the installation and commissioning charges could not be included in the value of the goods, the question of limitation relating to the show cause notice issued under Rule 9(2) read with Section 11A of the Act for the period from 1982-83 to 1987-88 is not decided." 4.12 Further in the case of S S Engineers [2019-TIOL-1124CESTAT-MUM], in similar situation a coordinate bench of tribunal held as follows: "6. We have carefully considered the submissions made by both the sides and perused the records. We find that some of the show cause notices were issued on the ground that the value of bought out items supplied by the Appellant is includible in the value of the contract price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not clear the Boiler in Complete knocked down Condition or Semi Knocked Condition. The Appellant's own manufactured goods, at the time of clearance from the factory, have identity of individual components or equipments which has not been disputed by the revenue. Though the adjudicating authority held that the bought out items are critical components of the Boiler but we find that even not a single bought out component has been named as critical component which shows that the allegation has no basis. Simply by alleging that the value of bought out goods are liable to be included in the assessable value, duty cannot be demanded. Even though the show cause notice mainly alleged that the bought out items are liable for duty but in the impugned order the demand has been made on whole contract price which shows that the demand has no basis. Nevertheless we find that the 80 TPH Boiler on the basis of which demand has been confirmed against the Appellant is a huge structure which was erected at site and is permanently attached to earth. It was erected piece by piece and not by merely putting some goods together viz. the Appellant's own manufactured goods alongwith bought out components. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t goods are not being part of any excisable goods at the time of their clearances in that case no duty can be demanded. In case of M/s Intech Surface Coating Pvt. Ltd. Vs. CCE, Pune - III, this bench on the issue of inclusion of bought out items in the assessable value has held as under : "We have gone through the rival submissions. We find that it is not in dispute that the Revenue is seeking to include the cost of bought out items supplied directly to site for the purpose of charging Central Excise duty. It is not in dispute that no manufacturing activity in respect of such items has been done by the appellant. The liability to Central Excise duty arises only when there is a manufacturing activity undertaken and in the absence of manufacturing activity the liability of Central Excise does not arise. On a similar issue in the case of Acer India Ltd. (supra) observed as follows: 55. It must be borne in mind that central excise duty cannot be equated with sales tax. They have different connotations and apply in different situations. Central excise duty is chargeable on the excisable goods and not on the goods which are not excisable. Thus, a goods which is not excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Drive, Hoist & Holding Drums, Wire Ropes, Spur Gears Gear Boxes, Motors, Brakes, Trusters, Limit Switches etc.) with sling attachment, Electrical Control Panel, Operator's Cabin etc. including electrical hardware 2 Cane, Rake and Baggase Carriers Columns, Side Plates, Runner Beams, Runner Hooks, Chutes, Rake, Staircase, all Sprockets & Shafts with Plummer Blocks, Bearings, Stretching Gear, Idler Pulleys with Shafts, Brackets, Bush Bearings, Chain for 1st Cane Carrier, Slats, Motor with variable speed drive, Reduction Gear Box, Spur Gear, Pinion Set, Starter. Base Frame. Foundation Bolts for Cane Carrier Drive. Troughs Rakes, Chain, Runners, Service Gangway, Tensioning Devices, Set of Bagacillo Collecting Hopper with Bagacillo Screens and Sliding Door for feeding bagasse to boilers 3 Cane Kicker Central Shaft, Knives, Plummer Blocks & Bearings, Drive Base Frame, Motor with Starter Reduction Gear Box, Coupling etc. 4 Cane Leveller Shafts & Hubs, Flywheels, Bearing & Plummer Blocks. Couplings, Set of nuts & bolts for knives, knives. Motor with starter, Rails, Rotor Assembly complete with hubs, Flywheels, Bearing Plummer Blocks, Nut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Vacuum Filter complete with drive, Filterate Receiver, Mud Belt Conveyer including supporting structure at the Mud Discharge End, Mud Mixer, Catchall installed in the line going to condenser. 11 Evaporators Calandria with bottom saucer for 2000 M2 H.S.A, body semi-kestener (1st body). Calandria with, bottom saucer for 1000 M2 H.S.A. body semi-kestener (2nd A body), Calandria with bottom saucer for 600 M2 H.S.A. body semi-kestener (2nd B body), Calandria with bottom saucer for 450 M2 H.S.A. body semikestener (3rd body), Calandria with bottom saucer for 250 M2 H.S.A body semi-kestener (4th body). Body of Evaporator, Catchall for Evaporator. A set of incondensibles collecting coils, syrup/juice samples etc 12 Vacuum Pans Calandria for 60 T. vacuum pan with bottom saucer. Body for 60 T vacuum pan, Catchall for vacuum pan. Pan Discharge Valve complete with operation mechanism, Set of pan washing coils, feeding headers and all other pan accessories 13 Grass Hopper Plain Tray-Grass Hopper, Multi Tray Grass Hopper, Drive Motor for Grass Hopper with pulley starter, V Belt etc., Hot Air Blower with air heater, Cold Air Blower. 14 Sugar Elevators&n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a as well as in the case of Quality Steel Tubes Pvt. Ltd. v. CCE, 1995 (75) E.L.T. 17 (S.C.) and Mittal Engineering Works Pvt. Ltd. v. CCE, 1996 (88) E.L.T. 622 (S.C.). 4. The Commissioner has relied upon the decision of the Tribunal in CCE, Chennai v. Binny Ltd., 2003 (151) E.L.T. 106, holding that similar items were excisable, however, as rightly pointed out by the learned counsel for the appellants, the assessees did not challenge the Commissioner's order treating some of the sugar manufacturing equipment as movable and hence excisable, for the reason that the demand was dropped on the ground that it was barred by limitation and hence the finding of excisability was not contested by the assessees. 5. In the light of the above discussion, following the ratio of the apex j court's decision in Triveni Engg. & Inds. Ltd. supra, on the basis of which CBEC Circular No. 58/1/2002CX., dated 15-1-2002, which is binding on the Revenue 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.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red were in assembled form and were excisable goods before their clearance from the factory. In case of Frick India Ltd., the issue involved was whether the value of bought items is includible in the value of Compressor whereas in the present case the issue is demand of duty under the guise of bought out goods which itself is not clear and even the goods coming into existence at site does not merit consideration as excisable goods. Thus we find that all the judgments cited by the Appellant does not have any effect on the present controversy. whereas the Appellant's case for the previous period stands decided in their favour. We also find that even if it is assumed that any duty is demandable from the Appellant, it would not be liable to be paid as the alleged activity of installation of goods took place at the factory of customer and hence they are eligible for exemption in terms of Notification No. 67/95 - CE. 9. The adjudicating authority 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e carried out to make the LPG Bullets as immovable goods, therefore, all such activities are not part and parcel of the manufacturing activity of the appellant in respect of LPG Bullets. Therefore, inclusion of any amount over and above the price of the LPG Bullets adopted for clearing of the goods from the factory is incorrect and without authority of law. In support, she placed reliance on the following decisions:- a) Triveni Engineering & Indus Ltd. - 2000 (120) ELT 237 (SC) = 2002-TIOL-14-SC-CX b) Milestone Aluminium Co. Pvt. Ltd. - 2007 (214) ELT 417 (T) c) Sanmar Weighing Systems Ltd. - 2005 (190) ELT 228 (T) = 2005- TIOL-1298-CESTAT-MAD d) Emerson Network Power India Pvt. Ltd. - 2004 (176) ELT 168 (T) e) Fuse Base Eltoro Ltd. - 2000 &116) ELT 179 (T) f) Goetze (India) Ltd. - 2004 (169) ELT 274 (T) = 2004-TIOL-366- CESTAT-DEL g) Kerala State Electronic Dev. Corpn. - 2008 (224) 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) l) Jai Hind Oil Mills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding duty are not excisable goods therefore, the question of payment of duty does not arise. Further, we find that bought out items have never came to the factory of the appellant and the appellant is liable to pay duty only on the goods manufactured by them. In that circumstance, for the bought items, the appellant is not required to pay duty. Therefore, we hold that demands in the impugned orders are not sustainable. Accordingly, the impugned orders are set aside." (ii) Tycon Automation Pvt. Ltd. Vs. Commissioner of Central Excise, Noida- 2017 (357) ELT 861 (Tri.-All) "6. Having considered the rival contentions. We find that it is an admitted case of Revenue that the appellant have not brought the bought out items in their factory of manufacture and it is further admitted fact that the control panels are not cleared along with bought out items from the factory 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 facts and circumstances that the appellant have placed the orders on third-party vendors for supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to manufacture of final products specified in column (3) of the said Table; from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) : Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zone or to a 100% Export Oriented Undertaking or to a unit in an Electronic Hardware Technology Park or to a unit in a Software Technology Parks), which are exempt from the whole of duty of excise leviable thereon or are chargeable to 'Nil' 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand is time barred. We find from the records that the facts were in the knowledge of the revenue since very beginning and even earlier to the demand confirmed against the Appellant which was eventually set aside by the Tribunal. The said order passed by Tribunal reported at 2008 (221) ELT54 was upheld by the Hon'ble Mumbai High Court. In such facts, we find that there is no ground to raise demand by invoking extended period of limitation as 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 counts as discussed above and requires to be set aside." 4.13 In the present case by the impugned order, revenue has not sought to add the value of the brought out items in the assessable value but has sought to add the some value which they have determined. Impugned order records that there is difference in value which has been shown by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Commissioner (AR) has relied upon) and has distinguished the facts as stated herein above. In para 8, in the case of S.S. Engineer, the Tribunal (6) Appeal No. E/1456/2011 has brought out very clearly that in case of bought items which are cleared to the customers site directly and in turn used for erection of immovable properties, the demand becomes totally incorrect or fallacious. For this purpose, the Tribunal relied on the cases of Walchandnagar Industries Limited [2014(311)ELT 274] and Frick India Limited [2007(216)ELT 497 (SC), these we find that the same judgments which are relied upon by the adjudicating authority in this case and dropped the proceedings, initiated by the show cause notice. It is undisputed, in the case in hand, that after clearing the boilers from the factory premises and by assembling them at the site of customers along with bought out items, the waste heat recovery boilers become immovable. If that be the case, we find that the reasoning adopted by the adjudicating authority, in the case in hand, in the impugned order is correct, legal and does not require any interference. 4.14 We also note that in the case of Statfield Systems (Coating) Pvt Ltd. [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows:- "5. It need not be stated that the excise duty is not payable in respect of an immovable property. The plant when erected by embedding in the civil work becomes an immovable property and would not therefore attract any excise duty. The contention of the respondents, however, is that the plant came into existence in an unassembled form at site and became operational after it was embedded in the civil work. Though the civil work did not attract excise duty, excise duty was payable on the plant in an unassembled form. The relevant wording in the show cause notice in that regard is quoted below :- "The plant already came into existence in an unerected form as per drawing and designs approved by M/s. B.P.C.L. before the same was installed erected and affixed to the ground with civil work. The civil work did not attract duty being immovable property." (Underlining supplied) In our view, mere bringing of the duty paid parts in an unassembled form at one place, i.e. at the site does not amount to manufacture of a plant. Section 2(f) of the Central Excises and Salt Act, 1944 (for short "the Act") defines the word "manufacture" to inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make it movable. Hence it is held to be considered as movable and accordingly excisable. In the present case, BARC and other customers of the appellant have certified that the chlorination plant installed in their premises are fixed permanently to earth and not meant to be shifted/transferred. No contrary evidence is placed by the Revenue. 14. In these circumstances, therefore, we are of view that the chlorination plant installed at various sites out of the goods manufactured and cleared by the appellant from their factory on payment of excise duty and assembling with other bought out items at the site of the customer, resulted into an immovable property and hence not leviable to excise duty. Consequently, the impugned order is set aside and the appeals are allowed with consequential relief, if any, as per law." 4.16 As we find that impugned orders cannot be sustained on grounds of jurisdiction and merits, we do not consider the other grounds urged by the appellant in appeals and during course of argument. 4.17 In view of the discussions as above we do not find merits in the impugned orders so as to sustain them. 5.1 Appeals are allowed. (Order pronounced in the open cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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