2000 (11) TMI 975 - AT - Central Excise

Tribunal Decision: Turbo Generator Sets Assembly Not Manufacturing; Reexamination of Duty Short Paid Pending

The Tribunal concluded that the assembly of Turbo Generator sets at the site did not amount to manufacturing and were not excisable goods, aligning with a ... Excisable goods - installation/erection versus manufacture - value of bought out items not includible in assessable value - duty on interest on advances - remand for fresh valuation of individual clearancesExcisable goods - installation/erection versus manufacture - Installation or erection of turbo alternator does not constitute excisable goods. - HELD THAT: - The Tribunal held that the question whether assembly of turbo generator sets at site amounts to manufacture was determinative. Relying on the ruling of the Apex Court in Triveni Engineering & Indus. Ltd., the Tribunal concluded that installation or erection of turbo alternator on a specially constructed platform cannot be treated as a common base rendering the alternator movable excisable goods; accordingly such installation/erection does not make the equipment excisable under Heading 85.02. [Paras 4, 6]Installation or erection of turbo alternator is not excisable goods.Duty on interest on advances - Interest on advances is not liable to duty. - HELD THAT: - The Tribunal found the issue to be covered by the Supreme Court decision in VST Industries Ltd., which settles that interest on advances is not exigible to central excise duty. Having applied that precedent, the Tribunal accepted the assessee's contention and dismissed the Revenue's contention on this point. [Paras 6]Duty on interest on advances is not leviable in light of the cited Supreme Court precedent.Value of bought out items not includible in assessable value - remand for fresh valuation of individual clearances - Valuation of individual clearances requires fresh determination by the Adjudicating Authority; matter remanded for that purpose. - HELD THAT: - Both parties conceded that the value of bought out items cannot be added in determining assessable value. The Department pointed out that valuation with reference to individual clearances from factory to site was not determined. The Tribunal noted that the Commissioner (Appeals) had already remanded this valuation issue and directed the concerned Adjudicating Authority to re-examine duty short-paid on individual clearances, determine value in accordance with law, and afford the assessee an opportunity to be heard. [Paras 5, 7]Issue of valuation of individual clearances remanded to the Adjudicating Authority for fresh consideration and determination in accordance with law.Final Conclusion: All appeals disposed: installation/erection of turbo alternator held not excisable; duty on interest on advances held not leviable; valuation of individual clearances remanded to the Adjudicating Authority for fresh determination and opportunity to the assessee. Issues Involved:1. Dispute regarding duty on bought-out items, duty on interest on advances, and duty paid on various individual clearances.2. Whether assembly of Turbo Generator sets at the site amounts to manufacture or not, and if they are excisable goods.3. Valuation of bought-out items in determining the assessable value.4. Duty on interest on advance.5. Duty short paid on various individual clearances.Analysis:Issue 1:The appeals involved a dispute regarding duty on bought-out items, duty on interest on advances, and duty paid on various individual clearances. The appellants, a Public Sector Undertaking, manufactured engineering items, specifically Turbo Generator sets supplied under 18 contracts to various customers between 1977 and November 1996. The dispute centered around whether the assembly of these sets at the site constituted manufacturing and if they qualified as excisable goods.Issue 2:The primary issue was whether the assembly of Turbo Generator sets at the site amounted to manufacturing and if they were excisable goods. The Commissioner (Appeals) had previously held that the sets were excisable goods based on a specific case law. However, the Tribunal referred to a Supreme Court decision that overturned the earlier ruling. The Tribunal concluded that the installation or erection of turbo alternators did not classify as excisable goods, aligning with the Supreme Court's interpretation.Issue 3:Both parties agreed that the value of bought-out items should not be included in determining the assessable value. However, the Departmental Representative highlighted the necessity of valuing individual clearances from the factory to the site, which had not been done and required attention from the Adjudicating Authority. The matter had been remanded by the Commissioner (Appeals) and was pending before the Assistant Commissioner for resolution.Issue 4:Regarding duty on interest on advances, it was noted that the Supreme Court had already settled this issue in a previous case. The Tribunal concurred with this position, indicating that the matter was well-covered by the Supreme Court's decision.Issue 5:The appeals also addressed duty short paid on various individual clearances. Since the matter had been remanded by the Commissioner (Appeals) for further review by the Adjudicating Authority, the Tribunal directed the concerned authority to reexamine the issue and determine the value in accordance with the law, providing the assessee with a fair opportunity.In conclusion, the Tribunal disposed of all 18 appeals based on the above considerations, emphasizing the interpretation of excisable goods, valuation aspects, and the settled legal positions on interest on advances.