TMI Blog2023 (4) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... and installed at the site of the customers - it is clear that bought out items are neither used as parts nor accessories of the lattice mast as they are not required for manufacture of lattice mast. Therefore, trading activity of above items is separate activity which is independent from the manufacturing activity of the appellant. The manufacturing of lattice mast is an independent manufacturing activity for which except the material used in making lattice mast no further bought out items are required. Therefore, the bought out items in any way not taking part in the manufacture of lattice mast. This issue has been considered in various judgments that if any bought out items are supplied along with manufactured items, the value of the same cannot be included in the value of manufactured goods and this issue has been considered in KERALA STATE ELECTRONIC DEV. CORPN. VERSUS COMMR. OF C. EX., TRIVANDRUM [ 2007 (10) TMI 198 - CESTAT, BANGALORE] where it was held that Bought out items such as cable, cards, etc., used for installation of machinery and its functioning, fact that they are bought out items on which excise duty has already been paid is not disputed - Hence value of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notices were issued to the appellant proposing demand of differential duty on the ground that value of the bought out items purchased is includible in the assessable value of the so called High Mast Tower cleared by the appellant. The Adjudicating Authority, confirmed demand against the appellant and penalties have been imposed therefore, these appeals are filed by the appellant. 3. Shri Anand Nainawati, learned Counsel appearing on behalf of the appellant submits that the appellant are engaged in the manufacture of Lattice Mast (only pole) and they do not have facility to manufacture any other item so as to manufacture not High Mast Lighting Tower (complete lighting system emerging in immovable position). The bought-out items are not assembled by the Appellant along with the lattice mast. Lattice mast and bought-out items are assembled at the time of erection of High Mast Lighting Tower at the site by the customers. There are number of cases in which the Appellants have only sold the lattice mast to the customers and have not sold the bought-out items. In fact, in some cases, the customers place purchase order on the Appellants for supply of bought-out items alone and not for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition is that the High Mast Tower had emerged at the site of the customers at various different locations which are not necessarily fall within the jurisdiction of the Commissioner, Silvasa. Therefore, he submits that Commissioner Silvasa has no jurisdiction to examine the correctness of the excise duty paid on the High Mast Tower. 3.2 Without prejudice, he further submits that High Mast Tower had emerged as an immovable property at the site of the customers. The High Mast Tower is permanently attached to the earth and has to be dismantled for removal and what would emerge on such dismantling would only be individual parts and not complete High Mast Tower. Hence, no duty is liable to be paid on the same. This submission is fully supported by the decision of the Hon'ble Supreme Court in the case of Triveni Engineering Industries Vs. CCE-2000 (120) ELT 273 (SC). In view of the above judgment, even if the activity has amounted to manufacture, no excise duty can be charged on the same. This legal position has also been accepted by the CBEC vide Board Circular No. 58/1/2002-CX dated 15.01.2002. 3.3 Learned Counsel further submits that merely for the reason that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. We have carefully considered the submissions made by both the sides and perused the record. We find that there is no dispute on the fact that appellant are manufacturing lattice mast and during the course of manufacture no bought out items are used in the manufacture. The bought out items which is subject matter of the present dispute are purchased and thereafter sold as trading activity by the appellant. Even though the bought out items are supplied by the appellant as trading activity but the same is not part and parcel of the manufacture of lattice mast. At the most, this bought out items are used for completing and erection and installation of High Mast Tower. There is clear distinction between lattice mast manufactured by the appellant and High Mast Tower erected and installed at the site of the customers. The appellant have provided the details of use of the bought out items at the site which is as under:- Sr. No. Name of the equipment/ Bought-out item Purpose/ Use 1 Wire Grip Clamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate activity which is independent from the manufacturing activity of the appellant. 6. It is also not even a case that appellant have provided the standard set of bought out items along with lattice mast but only in few cases it is supplied along with lattice mast. There are also cases where appellant are supplying only bought out items as a trading activity and not with lattice mast. This shows that the bought out items are optional for the customers to buy from the appellant manufacturing lattice mast. We find that the manufacturing of lattice mast is an independent manufacturing activity for which except the material used in making lattice mast no further bought out items are required. Therefore, the bought out items in any way not taking part in the manufacture of lattice mast. This issue has been considered in various judgments that if any bought out items are supplied along with manufactured items, the value of the same cannot be included in the value of manufactured goods and this issue has been considered in the following decisions:- (a) In the case of Unitech Power Transmission Limited (supra), the Mumbai bench of this Tribunal on the identical facts passed the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en taken by the appellant nor disputed by the Department. In the appeal filed by the Department reliance is placed on the definition of transaction value it has been averred that the respondent is liable to pay duty on the entire contract price which includes cost of nuts, bolts, washers, shackles, hangers, since those are integral parts of transmission line towers and without these transmission line tower cannot be erected and made operational. The definition of transaction value i.e. the price actually paid or payable has to be read in the context of the words i.e. for the goods when sold and it includes . The price paid or payable should have nexus with the excisable goods manufactured and sold by the manufacturer. Obviously, the contracts provide for the price of the transmission line towers manufactured by the respondent and it is only this price which could be termed as the price actually paid for the transmission line towers manufactured by the respondent. The said definition cannot be applied to the cost of the goods which are not manufactured by the respondent. Admittedly the nuts and bolts and the other accessories are neither manufactured by the respondent, nor are thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h it was held that the value of bought out items received at site and used in erection of boilers, includible in assessable value of boilers, because such bought out items are necessary to make boiler functional. The ratio of this case is not applicable for the fact that the transmission line towers have no functional attributes. Further the said case is pending before the Hon ble Supreme Court as reported in 2007 (207) E.L.T. A186 (S.C.) 57. Further in the case of Kerala State Electronics Dev. Corporation Ltd. v. Commissioner of C. Ex., Cochin it is held that bought out items sent to the site where they were assembled along with the traffic controllers for manufacture of traffic signal system bought out items become part of the immovable property and not part of the traffic controller - Value not addable to the duty paid goods cleared by the assessee from their factory - Section 4 of Central Excise Act, 1944. The nuts, bolts and other accessories in the present case are used at site for erection of the transmission line towers which come into existence being as permanently affixed to earth and hence become an immovable property. The said decision has been upheld by the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of imagination lead to the conclusion that plates and black shields are part and parcel of the machine. It was held that the value of plates and black shields cannot be included in the value of the photocopiers. Ld. Advocate argued that no doubt that the above-mentioned fittings are required to make the cistern functional but on account of that they cannot be called as parts of these cistern. The Tribunal in the case of EID Parry India Ltd. v. CCE - 2000 (124) E.L.T. 815 has held that the value of the fittings which were removed from godown after testing under a separate invoice is not includable in the assessable value of the cistern. The Tribunal in the case of Super Electronics v. CCE - 2001 (127) E.L.T. 302 held that even though speaker in audio-decks is essential, the same cannot be integral part of the main item that is audio-decks appellants. What the appellants manufactured is only the cistern which is made of ceramics. In these circumstances relying on the various case laws cited by the appellants, we hold that the value of the boughtout items is not includable in the assessable value of the cistern. The case relied on by the Revenue is distinguishable. In that case the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys the aforesaid co2mponents/items from the market and supplied to the buyers on their option. When it is so, then we find no reason to sustain the impugned order and the same is hereby set aside. (d) Mumbai bench in the case of Kores (India) Limited (supra) considered the similar issue and taken the same view: 5 . Having considered the rival submissions, we find that ruling of Thermax Bobcock Wilcox Ltd. (supra) relied upon by the learned AR for the Revenue, is clearly distinguishable because boiler is not cleared in its assembled form as such but cleared in several consignments part by part and assembled, whereas in the facts of the present case, the drill rig is complete when removed or cleared from the factory, and thus, the ruling of Thermax Bobcock Wilcox Ltd. is not applicable in the present case. (e) The Hon ble Supreme Court in the case of Ingersoll Rand (India) Limited held that drill rods/ pipes and drill bits are not to be treated as parts of the drilling rig. The relevant order of Apex Court is reproduced below: [Order]. - This appeal has been filed by the Revenue against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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