TMI Blog2004 (11) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... products are sold and supplied to the customer in the following manner : Supplies through pipelines are made to Tata Iron Steel Co. (in short TISCO) and Tata Engg. and Locomotive Co. (in short TELCO). The product in liquid form are pumped through the pipeline in gaseous form. The other mode of supply of gases in liquid form are made through Vacuum Insulated Transport Tanks (in short VIST). The supplies are made from appellants' factory to buyers' factories and emptied there in Vacuum Insulated Storage Tank (in short VIST). In such cases, the appellant at this cost and expenses erects and installs VISTs at the factories of the appellants concerned. Such customers buying the goods from the Burma Mines factory are Usha Martin Industries, Chittaranjan Locomotive Works, Eastern Railway, Kanchrapara etc. There are also several buyers who simply buy the goods from the said Burma Mines factory. In such cases, the appellant has not installed any VISTs at the buyers' factories nor has installed any pipelines. Such buyers are Alloy Steel Plant, Deputy Controller of Stores of Eastern Railway, etc. In view of the extremely hazardous nature of the products, there has to be a continuous chec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between whose factory and the appellant's factory it had erected and was maintaining the pipeline. For rendering these services towards maintenance and upkeep of VISTs and pipelines, the appellant was required to spend huge expenses and correspondingly charging facility charges. The facility charges had nothing to do with and were not in any way related to manufacture or sale of liquid gases. They are charging on the monthly basis by receiving a separate bill. They only charge from the buyers who had required the appellant to provide the said facility. No facility charges were being taken from other customer to whom no such facility were provided. The facility charges were not connected or related to sale or supply of the goods. The buyers were absolutely free to engage or not to engage the appellant for providing the case. He submits that in the case of TISCO, the meter was located in the appellant's factory and even the goods were cleared from the factory of appellant on sale. In the case of other buyers, there was no Pipeline and the appellant had only provided and maintaining VISTs on their respective factories and this was the general mode of transport. He submits that the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) E.L.T. 359 (Tri. - Mumbai), Inox Air Products Ltd. v. CCE, "Valuation (Central Excise) - Normal price - Commissioner included the hire charges of storage tank in the assessable value in total disregard to Tribunal's earlier judgment - Facility or storage provided to some buyers - Charges not includible and Commissioner bound to follow Tribunal order if he not go for appeal to higher authority - Section 4 of Central Excise Act, 1944 (para 4) 2004 (164) E.L.T. 257 (Tri. - Del.) Grasim Industries v. Commissioner of Central Excise, Indore, M/s. BOC (I) Ltd. v. Commissioner of Central Excise, Chennai - Order No. 835/KOL/2003, dated - 20th January, 2004 [2004 (175) E.L.T. 236 (Tri.)], M/s. BOC (I) Ltd. v. Commissioner of Central Excise, Chennai - Order No. S-114/A-194/KOL/2004, dated 21st April, 2004. He, further, relies on the following decisions : (i) 2002 (144) E.L.T. 359 (Inox Air Products Ltd. v. CCE - CEGAT) (ii) 1988 (36) E.L.T. 730 (CCE v. Indian Oxygen Ltd. - Supreme Court) (iii) 1997 (89) E.L.T. 3 (PSI Data Systems Ltd. v. CCE - Supreme Court) (iv) 1998 (99) E.L.T. 481 (Thermax Ltd. v. CCE - Supreme Court) (v) 1999 (108) E.L.T. 402 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were being charged from other customer to whom no such facility were provided. The facility charges were not dependent upon to sale or supply of the goods during manufacture concerned. These were payable on the monthly basis irrespective as to whether the buyer had purchased any goods from the appellant during the month concerned and irrespective of the quantum of the goods purchased. Even buyers were free to engage for providing the said services or the said facilities. The VISTs or Pipelines should have been constructed by the buyers themselves or could have been constructed from any outside source. Similarly, maintenance could also be either by the buyer themselves or through any outside agency. Further, a perusal of their contract with different customers also indicates that the facility provided by appellant for storage of gases at the customer's premises were optional to their customers and the charges were not leviable on the customers whether they did not opt for installation and maintenance of such facility by appellant. Therefore, the charges cannot in any way be considered as a condition of sale for the goods. These charges were recovered by the assessee only from tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has to incur various expenses including overheads, salaries and emoluments of the engineers and technical staff depending upon the inflation rate. The wholesale price index is published by the Reserve Bank of India and also keeps on varying and the appellant gets further amount towards the escalation. These aspects are not in any way related to the price charge for the sale of the goods. The contention of the Commissioner that the judgment of the Hon'ble Supreme Court in the appellant's own case reported in 1988 (36) E.L.T. 730 as distinguishable tenable. The Delhi Bench of Tribunal in the case of Grasim Industries v. Commissioner of Central Excise, Indore has occasion to interpret the judgment in the light of amendment of Section 4 of the Central Excise Act and also in the light of Circular No. 81/2000-TRU, dated- 30th June, 2000 and Hon'ble Justice K.K. Usha, President has observed as under : "We find merit in the contention raised by the appellant. The ratio of the decision in C.E.C. v. Indian Oxygen, referred above, would still be applicable in respect of the amendment brought to Section 4(1)(a). When examined the above decision, we find that the Supreme Court has treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In present case also the supply of services i.e. maintenance, construction of VIST and the pipeline was not a manufacturing activity and was ancillary to the supply of gases but it was not strictly incidental duty. There are classes of persons who can take either these gases without supply of the VIST by the manufacturer. In such cases, the question of charging facility charges would not arise. The present appeal is fully covered by the decision rendered in the case of Inox Air Products Ltd. v. Commissioner of Central Excise, Mumbai-VII reported in 2002 (144) E.L.T. 359 (Tri.-Mumbai) and 2004 (164) E.L.T. 257 Grasim Industries v. Commissioner of Central Excise, Indore. The purported demand of duty of Rs. 4,10,240/-, Rs. 5,12,800/- Rs. 31,801/- even otherwise is illegal. These demands have been confirmed on the basis that the facility charges from the TELCO/TISCO for the period from April, 2001 to December, 2001 were receivable by the appellant. The agreement dated 13-12-1997 with TELCO was due to expire on 1-12-2001 but it was terminated in advance on 1-4-2001. Similarly, the demands relates to the facility charges allegedly receivable from TISCO, Eastern Railway, Chittaranjan L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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