2000 (4) TMI 438

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....tems supplied to customer's site by respondents (and in a few cases, along with bare frames manufactured by them) are to be charged to duty, as "they were integral and essential products of their machines...." as alleged in show cause notice dated 20-4-1988 and demanding duty of Rs. 5,50,263.82 as well as penalty, both under Rule 9(2). 3. Shri M. Kunhi Kannan, ld. DR reiterates the grounds of appeal of Revenue which, inter alia, proposes that such supply/clearances of these boughtout items at the customer's site amounts to manufacture of complete machines (under 84.45) ring frames (spinning)/ring frames (doubling) and prays for restoration of order-in-original confirming above noted duty and imposing penalty of Rs. 9000.00. He submi....

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.... page 198). (v)     Mere collection and separate sale of boughtout items is not manufacture as there is no assembling in the factory and testing etc. and cites :- (a)     Board's Circular No. 17/89, dt. 25-4-1989 (b)     Board's Circular No. 16/89 & (c)      Board's Circular No. 25/89, (d)     Tata Robin Frast Ltd. v. Collector, 1990 (46) E.L.T. 562 (T) (e)     CCE v. Permali Wallace Ltd., 1985 (21) E.L.T. 231 (f)      Punjab Breweries Ltd. v. C.C.E., 1985 (2) E.L.T. 231 (sic) (g)     Indian Oil Corporation v. C.C.E., 1987 (27) E.L.T. 482 (h)&nbsp....

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.... ratio of Tribunal's decision in Control Systems (supra) and find that this ground of appeal is also not legally correct. (iii)    The illustration of a car manufacturer using bought-out items has no relation to the facts of this case, as a car manufacturer actually uses all boughtout OE items to assemble a full car and test it, before it is cleared from their factory. This is not the case here as admittedly no assembly or erection with respect to the spindles etc. is done in respondents factory. (iv)    The ld. Commissioner (Appeals) has not erred in following the ratios of the Board's circulars and the case-laws on boughtout items. (v)     The law with respect to status of boughto....