TaxTMI 
TaxTMI 
1998 (7) TMI 167
X X X X Extracts X X X X
X X X X Extracts X X X X
....s by the Asstt. Collector. Show cause notice dated 31-1-1991 alleged that appellants are engaged in manufacturing Paints and Ironganic cementitious fire-proof coatings as classified by the assessee under sub-heading indicated thereunder. It was alleged that assessee had filed classification list No. 1/90-91 for the financial year 1990-91 and claimed exception for their products mentioned above under Notification No. 175/86-C.E., dated 1-3-1986 as amended, since their total turn-over for the preceding financial year : 1989-90, was well within Rs. 2 crore as per Notification No. 119/89, dated 27-4-1989. The assessee have started availing exemption under the Notification No. 175/86-C.E., dated 1-3-1986, as amended, from 1-4-1990 onwards and cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it of Rs. 20 lakhs and hence no duty is liable to be demanded. 3. Learned Asstt. Collector considered their points very carefully and on verification it was found that assessee had purchased these items and they were supplied independently without any process of manufacture. He noted that these materials were being mixed at the site by the consumer to make it Ethyl Silicate coating falling under different Chapter sub-heading 3210.90. He, therefore, accepted their plea to this extent and confirmed the demands with regard to other clearances to the extent of Rs. 70,187/- on the ground that assessee should have paid appropriate duty after exceeding full exemption limit of Rs. 20 lakhs. The assessee did not contest the confirmation of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Silicate coatings under Chapter Heading 3210.90. It was contended by appellants that these two bought out items are classifiable under different heading; they are duty paid and therefore clearance value cannot be added along with their "CDC" Zinc II Base which were being supplied to the customers. He submitted that in an identical case as in the case of CCE v. Kalinga Paints & Chemicals Industries reported in 1989 (44) E.L.T. 548 wherein it has been held that it not denied that operation of putting the two materials separately has been carried out outside the factory. But it has not been shown that putting these separately manufactured products in a common container, amounts to manufacture. It has been held that it may well be a final prod....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (99) E.L.T. 342 wherein it has been held that value of bought out items is required to be added in the assessable value. 8. We have carefully considered the submissions made by both sides. We notice that show cause notice gave general clearance figures of each goods which were manufactured and cleared by them. Appellants in their reply had pointed out for clearances of one of the goods in which the department had included value of clearances of bought out items also which were required to have been excluded. The Asstt. Collector on examination of the manufacturing process, noticed that these items were bought out items, which had been duty paid and had been supplied to customers without any process of a manufacture done and no such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed that they were sent as a composite product under the same gate pass and that zinc filler is an essential mixture for the use of `Zinc II Base'. However, the findings that no such manufacturing activity was done and appellant's contention that they were not sold in appropriate quantity was not adverted to by Revenue. The Asstt. Collector's findings is a finding of fact which has not been contraverted in the appeal memo. The contention of the assessee that item continues to remain as a bought out item and not as zinc mixture is sustainable as the same has not been contraverted by Revenue either in the show cause or in the reference application before the Commissioner. Before the SCN was issued, the department should have taken statements a....