TaxTMI 
TaxTMI 
2007 (2) TMI 26
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....able under sub-heading 85.25 of the Central Excise Tariff without following Central Excise formalities. The Commissioner demanded duty of Rs. 3,57,16,259/- on the item under proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 along with interest due thereon from ECPL. He also imposed a penalty of equal amount on ECPL. A penalty of Rs. 30 laths was imposed on on M/s. Aircel Limited (Aircel) under Rule 209A of the erstwhile Central Excise Rules, 1944/ Rule 26 of the Central Excise Rules, 2001/2002. Appeals have been filed by ECPL and Aircel. 2. The facts of the case are that Aircel Limited, Chennai imported various components under an agreement with ECPL to install and integrate a system for providing radio telephony. T....
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....se, having approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part) into complete or finished article shall amount to manufacture.' 4. Hence, the assembling of Transmission Apparatus for Radio Telephony by ECPL amounted to manufacture and Transmission Apparatus for Radio Telephony was classifiable under Chapter Heading 8525.00 attracting Basic Excise Duty at the rate 16% ad valorem. The transmission apparatus was fixed on top of the buildings by simple mechanical operation using bolts and nuts and were goods. The Commissioner also relied on the Board's Circular No. 58/1102-Cx dated 15-1-2002 and decided that as the system cou....
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....se levy. If the activity involved was considered to be manufacture, then the same was eligible for exemption under Notification No. 67/95-C.E. 6. In the appeal before the Tribunal, the appellants submitted that the network of MSC, BSC and BTS considered as an excisable goods constituting transmission apparatus for radio telephony was located in various districts in the State of Tamil Nadu and no complete system of MSC, BSC and BTS was located in the jurisdiction of the adjudicating authority. The imported items were fully manufactured and they had only installed them at various sites. MSC was the heart of the network and functioned as an interface between BSC on the one side and external network on the other side. BSC was a switching appar....
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.... Board's Circular No. 49/11/2002-ST dated 18-12-02, in support of their plea that the impugned activity did not in lye manufacture. The circular reads as follows: "Circular No. 49/11/2002-ST. dated 18-12-2002 In para 4(iv) it has been categorically clarified that integrated plants/machines, as a whole, may or may not be "goods". For example. plants for transportation of material (such as handling plant) are actually a system or a network of machines. The system comes into being upon assembly of its component. In such a situation there is no manufacture of "goods" as it is only a case of assembly of manufactured goods into a system. This cannot be compared to a fabrication where a group of machines themselves may be combined to const....
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....nsidered the submissions made by both sides. In the instant case, the appellants had imported various equipment comprising the Transmission Apparatus for Radio Telephony network such as MSC, BSC and BTS and installed the same at various locations spread over several districts. The adjudicating authority has found that the Mo bile Switching Centre, the Base Station Controller and the Base Transceiver Station imported by Aircel installed in several districts in the State by ECPL are excisable goods. It was admitted by the appellants that components of the system were movable goods, but could not be moved as their alignment was software specific in relation to their relative locations in the network. If the network was considered to be a compl....