TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 612
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....brief facts of the case are that the assessee-appellant are engaged in supply of various bought-out electrical items and accessories to various nodal agencies to provide electricity connection to below poverty line (BPL) households. They procured these items from various parties and supplied them to these nodal agencies in various combinations (BPL Kit). The combination of BPL Kits contained all or some of the items like Wooden or Polycarbonate board, DP switches, Kit- Kat Fuse, Piano switch, Bulb holders, CFL bulbs, MCB, Nuts , Bolts, Screws & GI wire, PVC/GI pipes, etc. Taking into account the different type of combinations and the nature of items cleared during the relevant period, the following categorization of these supplies have been....
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.... 3. The Revenue entertained a view that the assessee-appellant is liable to Central Excise Duty on such BPL kits cleared by them to their clients. Proceedings were initiated against the appellant-assessee for classifying the BPL kit under CETH 85371000 and to demand a Central Excise Duty of Rs. 2,28,15,486/-. The appellant-assessee contested the demand and submitted various documents and defence opposing the said demand. He confirmed duty demand of Rs. 2,28,15,486/-. He affirmed the demand for an extended period and imposed a penalty of equal amount on assessee-Appellants and Rs. 1,00,00,000/- on the Proprietor. Both the assessee-Appellants have filed appeals against the said order. 4. The ld Counsel appearing for the appellant-assssee ma....
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....ee. v) There is no case for invoking the extended period and imposition of penalty on such issue involved is one of interpretation of the statutory provisions including tariff entries. 5. To levy central excise duty on any goods, the same should have been produced or manufactured in India. Here, we are concerned with the scope of term "manufacture". Section 2(f) of the Central Excise Act, 1944 defines the said term as below: "2[(f) "manufacture" includes any process,- (i) Incidental or ancillary to the completion of a manufactured product; (ii) Which is specified in relation to any goods in the Section or Chapter notes of 16 [the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to 17 (manufacture; or] ....
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....character or use." 7. In M/s J.G. Glass Industries Ltd, 1988 (97) ELT 5 (SC), the Apex Court held that a two-fold test emerges for deciding whether the process is "manufacture". First, whether by the said process, a different commercial commodity comes into existence or whether identity of the original commodity ceases to exist; secondly, whether the commodity which was already in existence will serve no purpose but for the said process. In other words, whether the commodity already in existence will be of no commercial use but for the said process. Referring to their decision in M/s Empire Industries Limited 1985 (20) ELT 179 (SC), the Apex Court emphasized that in case of transformation into a new commodity commercially known as a distin....
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....ding 8517 85371000- For a voltage not exceeding 1,000 V" 10. We note that except in two categories of clearances, there is no evidence to show that the appellant-assessee is even putting together an assembly of various electrical components and accessories in order to make any new identifiable product. Here, it is necessary to find that even if the goods were cleared and identified as BPL Kit, whether such goods can at all be considered as a new excisable item. Here, the main thrust of the Revenue is that there is an assembly process undertaken by the appellant-assessee. We note that mere putting together of two or more items by itself will not make an assembly of a new item. In M/s Narang Latex and Dispersions (P) Ltd, 2001 (134) ELT 48....
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....a different character or use. The electrical components or switches are mounted on the board before clearance. The goods cleared by the appellant were generically called as "BPL Kit." It is apparent that the method of clearance is mandated by the terms of agreement with their clients. There is no standard commercially identifiable item which is available for sale or purchase in the market. In other words, there is no "BPL Kit" commercially known and marketed. The clearances made by the appellant-assessee to the various clients as per their requirement are not any new manufactured product, commercially identifiable as "BPL Kit." 12. The original authority upheld the duty demand partly, on the ground that the process of mounting two componen....