1998 (1) TMI 164

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rs. 50,000/- is under challenge in this appeal. 2. Appellant, engaged in the manufacture of compressors and drilling equipment of various varieties all falling under erstwhile T.I. 68 was clearing the goods on payment of appropriate duty. According to the appellant, certain bought out items such as control panel, hoses were also being supplied to some of the buyers of compressors. Prior to May 1984, whenever such bought out items were sold along with compressors, duty was paid on the assessable value inclusive the value of bought out items. On 1-1-1985 classification list was filed in respect of compressors, without referring to the bought out items. The classification list was finally approved on 20-2-1985. Price list was filed on....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....respect of bought out items supplied along with compressor under a turn-key contract with ITI. On the same day the fourth show cause notice was issued proposing demand of Rs. 15,126/- for the period from 1-7-1985 to 31-12-1985 in respect of hoses supplied along with the excisable items. On 31-3-1986 fifth show cause notice was issued proposing demand of Rs. 9,913/- on the value of hoses for the period from 2-2-1986 to 31-3-1986. 4. On 4-4-1988 the Assistant Collector confirmed duty demand of Rs. 3,70,950/- as proposed in the show cause notices (Nos. 1, 2, 4 and 5 and not in show cause notice No. 3). On 7-5-1987 Commissioner (Appeals) set aside the order dated 17-3-1985 passed by the Assistant Collector regarding the provisional asse....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e value thereof should be included in the assessable value of compressors. This conclusion is challenged by the appellant. 8. The impugned order refers to various statements recorded from the employees of the appellant and other persons, all indicating that control panels are used to run motors which in turn are used to operate compressors. Compressor is a machine for displacement and compression of gases for the purpose of increasing the pressure of such gases. According to the appellant, compressors can be run using motor or diesel engine and control panel for diesel engine is unnecessary. Control panel is necessary only where electric motor is used, for safe operation of the electric motor. At page 6 of the impugned order the Com....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts. Curiously the assessee contended that control panel is an essential part of diesel generating set and the department opposed this contention. It was pointed out by the department that generating sets are manufactured in the market without these attachments and this assertion was disputed by the assessee. It was held that the Modvat credit will be available to the input which is actually by for being fitted in the generating set cleared by the assessee on payment of duty on the total value of which includes the cost of such inputs also. In other words, on the facts it was seen that the assessee was liable to pay duty on the assessable value of the final product which included the value of the control panel also. In these circumstances, i....