TMI Blog2001 (5) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ir unit at Kalkaji (New Delhi), at Mumbai; they purchased cooling units manufactured by local manufacturers and cleared the entire unit of split air-conditioners to the customers. They neither got registered as manufacturer of split air-conditioners with the Central Excise Department nor paid the central excise duty. A show cause notice dated 3-4-1996 was issued to them for demanding duty for the period from October, 1991 to April, 1996. The Commissioner, Central Excise, under the impugned Order No. 124/97, dated 30-12-1997, confirmed the demand of duty amounting to Rs. 56,14,293/- and imposed a penalty of equal amount on the Assessee Company. She also imposed a penalty of Rs. 25,000/- each on Shri B.R. Punj, Managing Director and Shri R.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. The learned Advocate, further submitted that in other words in the case of split air-conditioners, condensing unit and cooling unit were identified separately as such at the point of clearance from the factory and no duty was contemplated at the point of installation in customers' premises. He also said that they stock transferred some of the condensing units to their Mumbai Branch; that Mumbai Branch procured cooling units from local manufacturers; that the condensing units and the cooling units were installed at the premises of the customers through M/s. Airserco P. Ltd., a contractor; that at no point of time, manufacture was contemplated at the point of installation of the condensing unit and the cooling unit in the premises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section XVI as they had classified their product as air-conditioner. 4.The learned Counsel also mentioned that they had no reason to believe that there was manufacture at the point of installation; that the manufacture which is alleged in the impugned Order is out of a strained interpretation and the suggestion of the Department that there is manufacture is not well founded and accordingly question of any suppression on their part does not arise. He said that a reference was specifically raised by M/s. Voltas Ltd. with the Chief Commissioner, Mumbai/Commissioner Excise, Mumbai-III after the duty was made chargeable ad valorem; that M/s. Voltas suggested that if duty is to be paid @ 40% on condensing unit and cooling unit, Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the Revenue was dismissed by the Supreme Court on 3-3-2000 in Civil Appeal No. 396/2000 along with other appeals. He also referred to Board's Circular No. 479/45/99-CX, dated 17-8-1999 wherein it has been clarified that the activity of fitting the parts and components of an air-conditioner in a car does not result into manufacture of a new excisable item and contended that similarly installation of condensing and cooling units at customers' premises does not result into manufacture of split air-conditioners. Finally he submitted that if the duty is held to be payable by them, they will be eligible to avail of the Modvat credit of the duty paid in respect of condensing units and cooling units; that price has to be considered as cum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstalled by M/s. Airserco who were paid the job charges by the Appellants. He, further, submitted that the orders were received for split air-conditioners and the goods supplied by the Appellants were complete split air-conditioners; that they were giving warranty also for split air-conditioner, and not for only 'condensing unit' manufactured by the Appellants at Delhi. The learned SDR also mentioned that as per declaration filed by M/s. New Gold Air-Conditioner on 25-4-1996, they were only manufacturing 'sheet metal body of air-conditioners'; that thus it is evident that split air-conditioner came into existence only at the Godown/workshop premises of the Appellants. He finally mentioned that the activity of manufacturing of split air-cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete or finished goods and as such excise duty on split air-conditioner becomes payable by the Appellants before its clearance to the customers' site. Shri Raghunath Prasad Gupta, Commercial Manager of the Appellants at Mumbai, has mentioned in his statement that a complete unit of split air-conditioner was supplied to various customers in and around Mumbai. We also agree with the learned SDR that provisions of proviso to Section 11A(1) of the Central Excise Act for demanding duty for extended period are invokable in the present matter as the fact of manufacture of the split air-conditioner was suppressed from the Department by the Appellants. The letter dated 6-7-1995 from M/s. Voltas Ltd. addressed to the Commissioner, Bombay-III and the P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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