TaxTMI 
TaxTMI 
2015 (5) TMI 659
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....Boards Pvt. and penalty of Rs. 25,000/- on M/s. Pan India under Rule 26 of Central Excise Rules, 2002. The fact of the case is that the appellant M/s. Leo Circuit Boards Pvt. Ltd. are engaged in the manufacture of Professional Grade Printed Circuit Boards and Micro assemblies falling under tariff item no. 854210.90 of the First Schedule to the Central Excise Tariff Act 1984. The appellant is also engaged in the assembly of lottery terminal out of CKD kit supplied by M/s. Pan India Network Infravest P. Ltd. (hereinafter referred as M/s. Pan India) on job work basis however they cleared the said assembled lottery terminals without payment of excise duty. The detailed investigation has been carried out by the departmental officer and found that the appellant had cleared 1500 lottery terminals under the cover of commercial invoices without payment of duty and without issuing any central excise invoices during the period from 16/6/2006 to 22/11/2006. Said lottery terminals were supplied and delivered at godown of M/s. Pan India. As per the Revenue's contention the assembly of various CKD parts of lottery terminal amount to manufacture and therefore liable for excise duty. The show c....
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....ported from same source as part of same consignment. Referring to HSN explanatory note it was submitted that meaning of word incomplete or unfinished is that "something is lacking for completion of the product only in that case it will be treated as incomplete or unfinished". In the present case the imported lottery terminals were complete and finished and nothing was lacking. The goods were just required to be fitted by screw or plugging into jags. The adjudicating authority distinguished various case laws cited before him on the ground that these decisions were given in the circumstances where note 6 did not apply. Either goods were not falling within the Section XVI or note itself did not exist during the relevant period. Had note 6 not exist today or had it not been applicable to the lottery terminals, adjudicating authority would have followed the decisions cited before him and would have consequently held that activity did not amount to manufacture. It was submitted that only question to be decided that whether merely by applying the note 6 the activity of assembling the lottery terminal undertaken by the appellant will amount to manufacture. It is submitted that assembly did....
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....oods were exported, for this reason there is no malafide intention on the part of the appellant hence the notices barred by limitation consequently penalty also not imposable 3. On the other hand Shri V.K. Agarwal, Ld Addl. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that appellant has carried out complete assembly of lottery terminals from various components imported by M/s. Pan India and the said activity of assembling is nothing but conversion of various and number of components into a product called terminal therefore activity clearly under ambit of manufacture. He submits that reliance of the appellant on rule 2(A) of General rule for interpretation is of no help for the reason that this rule gives fictional effect for classifying the parts and components imported in KIT form as complete machine. This provisions only for the purpose of charging custom duty but by virtue of this rule, in Central Excise it cannot be interpreted that since CKD kit is classifiable as complete machine in custom therefore the same shall be applicable in Central Excise to interpret term "manufacture". It is his submission t....
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....rk basis. From packing list, C.A. Certificate, and bill of material submitted by the appellant, it is revealed that term appearing in the imported invoices and other documents ie. lottery terminals is consisting of 114 parts and the said scan copy of bill of material is given below:- From the above bill of material it is undisputed that appellant is engaged in the assembly of 114 components alongwith power supply, motherboard, LCD, keyboard which in our view clearly amount to manufacture. We do not agree with the submissions of appellant that only on the basis that Ld. Commissioner has conceded that if the goods are incomplete or unfinished in terms of note 6 of Section XVI of Central Excise tariff act activity amount to manufacture and else it will not amount to manufacture. The submissions is misleading that in the present case it is not the question whether the goods imported is incomplete or unfinished. Lottery terminal, though it is complete kit but same have been imported in en-numbers of parts. The said CKD parts do not qualify as complete lottery terminal. When all these parts are systematically assembled tested then only it takes form of distinguished product i.e. lottery....
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.... lottery terminal. Therefore the activity from conversion of various components of lottery terminal into complete unit of lottery terminal is undoubtedly amounting to manufacture and correctly chargeable to excise duty under chapter heading 84709010. The identical issue has been dealt in the following case laws:- PRADEEP @ ASHOK SHANTI PRASAD JAIN Versus COLLECTOR OF C.EX., MUMBAI-I [2013 (295) E.L.T. 283 (Tri. - Mumbai)] 5. We have carefully considered the submissions made by both the sides. The contention of the appellant is that he has been asked to pay duty twice on the same set of 15 cars, once by way of customs duty on the ground that he had imported cars in CKD condition and, therefore, is liable to pay Customs duty including countervailing duty on the imported parts by classifying the product as a car for the purpose of charging customs duty vide order-in-original dated 5.9.1987. The said order was taken up under the Kar Vivad Samadhan Scheme, 1998 and as per the said scheme, he has discharged the duty liability at 50% of the dues adjudged. Since he has paid Customs duty as per the provisions of law as mentioned above on the imported goods as motor cars, he is not liable ....
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....erent taxes, one under the Customs Act, 1962 and the other, under the Central Excise Act, 1944. So long as the Parliament has enacted laws providing for the levy of different taxes on different activities, such levies cannot be said to be invalid or illegal. Therefore, the argument that since they have paid customs duty on the parts imported in a CKD condition as a car, they are not liable to pay excise duty on the assembly of those parts into a car has no merit and accordingly we reject the arguments made by the appellant in this behalf. MAJESTIC AUTO LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT [2001 (130) E.L.T. 551 (Tri. - Del.)] 7.1 We have considered the submissions of both the sides. The appellants are importing components of motor cycle in SKD condition. No doubt the entire motor cycle can be assembled out of the components imported by them. However, the fact remains that what is imported by them are component parts only and not motor cycle as such. The process of assembly undertaken by them in their factory premises amounts to manufacture as out of the components imported by them a distinct commercial product with a new name, character and use emerges. The fact tha....
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....986 when the definition of manufacture under Section 2(f) of the Central Excise Act did not provide that the process mentioned in Section or Chapter Note would amount to manufacture. Further, our views are strengthened by the decision of the Appellate Tribunal in the case of C.C., Mumbai v. Maruti Udyog Ltd., 1996 (16) RLT 646 wherein it was held that for customs assessment purpose the goods have been deemed to be cars as a result of legal fiction. The imported goods, however, remain to be components assemblies or sub-assemblies. Similar views were also held by the Tribunal in the case of Wipro G.E. Medical Systems Ltd. v. C.C.,Bangalore, 1999 (106) E.L.T. 169. In that case the Appellants therein had imported two sets of CAT Scan System in SKD/CKD condition and the Tribunal observed that Central Excise Department has correctly levied duty on the System after they are fully manufactured as what was imported was merely deemed to be a system though for "practical purpose" were component parts. The Tribunal also observed that the Appellants therein had to establish a utility costing over rupees one crore to put the components together. Learned SDR has rightly referred to the Cooperatio....