Value of bought-out battery in UPSS included for duty discharge

The Tribunal upheld the decision against the appellant, ruling that the value of the bought-out battery supplied with the Uninterrupted Power Supply System (UPSS) should be included for duty discharge. The Tribunal emphasized the essential role of the battery in the functioning of UPSS for uninterrupted power supply, rejecting the appeal and dismissing the request for reference to a Larger Bench.

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Issues:
1. Inclusion of value of bought-out battery in Uninterrupted Power Supply System (UPSS) for the purpose of duty discharge.

Analysis:
The appeal was directed against Order-in-Appeal No. 280/2002-C.E., dated 26-3-2002. The appellants were served with 11 show cause notices for the period 1990-95 for the demand of differential duty due to the alleged non-inclusion of the value of batteries supplied separately to the purchaser of UPSS being manufactured by them. The Adjudicating Authority and the learned Commissioner (Appeals) confirmed the demand. The appellant's counsel argued that the battery supplied is a separate commercial commodity and its value should not be added to the UPSS, citing the decision of the Hon'ble Supreme Court in CCE v. Acer India Ltd. The counsel also highlighted the decision of the Larger Bench of the Tribunal in Luminous Electronics Pvt. Ltd. v. CCE, which stated that the battery cannot be treated as the core of UPSS. The appellant requested either allowing the appeal or referring the issue to a Larger Bench for resolution.

The JCDR contended that the UPSS manufactured by the appellant is a system, and the inclusion of the battery value is justified as it is an essential part for the system to function effectively. The JCDR referred to various cases where similar issues were considered by different Benches. The main issue to be decided was whether the value of the bought-out battery supplied by the appellant along with UPSS, as an optional item not attached to UPSS, should be included for duty discharge.

The Tribunal noted that in a previous case involving the appellant, it was held that the battery is an integral part of UPSS for uninterrupted power supply. The Tribunal also examined the decision of the Larger Bench regarding the classification of UPSS with a battery and concluded that it did not address the valuation aspect. The Tribunal distinguished the case of CCE v. Acer India Ltd., stating that the functioning of UPSS without the battery was ruled out in the current case. Consequently, the Tribunal found the appeal devoid of merits and rejected it, along with dismissing the request to refer the matter to a Larger Bench.

In conclusion, the Tribunal upheld the decision against the appellant, emphasizing the essential role of the battery in the functioning of UPSS for uninterrupted power supply, and rejected the appeal and the request for reference to a Larger Bench.

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