TMI Blog2001 (6) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... emi Knocked Down (SKD) condition. The paints was for coating the configuration of power plant after their assembly. The power plant was imported in SKD condition. The tools were for operating the plant after the same was made operational. In the relevant invoices, separate description and prices were shown for both the paint and the special tools. With regard to paints, the appellants have argued that it was an essential item for manufacturing machine. As regards the special tools, it was admitted that these could not be treated as capital goods. It was however pleaded that they could be covered under the Accessories (Condition) Rules, 1963. The Commissioner of Customs (Appeals) held that paints were not covered by the exemption notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 111/95-Cus. The exemption under this notification was provided from the payment of customs duty only to the capital goods, components, for assembling or manufacture and spare parts for maintenance of the capital goods imported. The tools, which could not be considered as spare parts, and whose role was only after the plant has been erected and was operational could not be considered as covered by the scheme of the exemption notification. 3.We have carefully considered the matter. The issue for our consideration in this appeal is whether (i) paints for coating of the equipment after assembly and (ii) special tools - pneumatic tools, electric tools and other hand operated tools for operating the completed power plant after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery, equipment, etc. is delivered in the market. In such a case, the cost of the paint will form an integral part of the value of the equipment sold. In this case, a number of items were imported for assembling the power plant. After the power plant was assembled, painting/repainting could just be considered as part of the finishing of the equipment so assembled. We consider that a reasonable view has to be taken in this matter and the cost of the paint should be taken as a part of the cost of the equipment. 6.In the technical specification at page 167 of the paper book, it has been so mentioned about the paint :- "Paint for 1 finish coating of the additional equipment and for 1 primer and 1 finish coating of the pipes as well as pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 1963 are extracted below :- THE ACCESSORIES (CONDITION) RULES, 1963 M.F. (D.R.) Notification No. 18-Cus., dated 23rd January, 1963 In exercise of the powers conferred by Section 156 of the Customs Act, 1962 (1 of 1962), the Central Government hereby makes the following rules, namely :— 1. These rules may be called the Accessories (Condition) Rules, 1963. 2 Accessories of and spare parts and maintenance or repairing implements of any article, when imported along with that article shall be chargeable at the same rate of duty as that article, if the proper officer is satisfied that in the ordinary course of trade :— (i) such accessories, parts and implements are compulsorily supplied along with that article; and (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te indication of value of different items was not material. We find that in the contract price, under Article 3 of the Agreement dated 26-4-1994, separate price had been indicated for different items comprising mechanical equipment, spare parts, electrical equipment, packing and forwarding etc. (refer pages 27 and 28 of the paper book). In para 3.2 of the Agreement, individual rates and prices were said to be firmed. Para-3.2 is extracted below : "3.2 It is clearly understood between the parties that the prices are on firm basis and that no adjustment of the contract price or the individual rates and prices therein shall be made in respect of any rise or fall in the cost of labour, materials or transport or any matter affecting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Accessories (Condition) Rules, 1963. We do not consider that this communication from the suppliers will change the legal position insofar as the special tools are concerned. 11.We, therefore, find no infirmity in the view taken by the ld. Commissioner of Customs (Appeals), insofar as the special tools are concerned. 12.As regards the interest, the ld. Commissioner of Customs (Appeals) had taken a view that as there was no question of refund of duty, there was no ground for refund of the interest also. As we have taken a view that the benefit of exemption Notification No. 111/95-Cus. was available in respect of the paints, but was not available as regards the special tools, the question of interest will have to be re-examined by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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