2019 (3) TMI 302

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.... dated 05/03/2008. The Lower Authority ordered payment of Central Excise Duty amounting to Rs. 53,89,920/- along with interest and penalty of an equal amount under Section 11AC of the Act. Period of dispute is June 2000 to December 2000. The brief facts leading to the impugned order are summarized below:- (i) The appellant is a manufacturer of refractory ceramic goods of various types, falling under Chapter 69 and 38 of the First Schedule to the Central Excise Tariff Act. They had manufacturing factories at Kolkata and Visakhapatnam, but the dispute relates to Kolkata factory. The goods manufactured are mostly sold to various Steel Plants and Cement Factories for use as lining material in their furnaces, ladles, converters e.t.c. The ref....

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....or the appellant along with Shri Abhijit Biswas, Advocate. Revenue is represented by Shri S. Mukhopadhyay, Ld. AR. 3. The learned Advocate explained the following points:- (i) The appellants manufactured the goods as per the specific requirements of buyers. In certain cases, the goods to be manufactured are sold at ex-works price to the buyers. In cases where the customers intend to get services like application of the product in the nature of repairing, maintenance, installation, spraying, lining etc. at their site, separate order is placed on the appellants by the said party mentioning therein, among others, the price for rendering such services. The said services, known as Application Services, are optional to the customers and no ....

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....on Services under the goods are ascertainable. In such cases, the appellants take the entire contractual price as transaction value and pay duty of excise accordingly. (v) In respect of Application Services rendered under a separate contract, the appellant is paying service tax on the value of the taxable service rendered in accordance with Finance Act, 1994. (vi) He submitted that the Application Services, if carried by the appellant, is in the nature of post manufacturing activity and such post clearance activities cannot be included in the assessable value of the excisable goods for the purpose of levy of duty. In this connection, he also submitted that the Board's Circular No. 139/08/2000-CX-4 dated 03/01/2001 has directed that po....

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....is a manufacturer of various types of refractory materials. These materials are used in lining the inside of blast furnace, converters etc. In certain contracts, they have not only supplied the goods, but also carried out "Application Services" which involve the lining of the furnace with refractory materials. The dispute is only with reference to those contracts where the application services and the value of goods have been specified separately, even though the contract is composite. The Lower Authority has taken the view that the entire contract value is to be considered for payment of Excise Duty. 7. We find that an identical dispute with reference to the appellant's factory situated at Vishakhapatnam was decided by the Bangalore Ben....

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....installation Application Services to the appellants. On those cases, there is absolutely no question of adding the application charges for the simple reason that such charges do not exist at all. In certain cases, apart from purchase of goods the buyers want the appellant to undertake repair/application/maintenance, etc. in their premises. For example, in certain furnaces they would have to replace the worn out refractory material with the new goods. In such cases, the appellants enter into a composite contract which indicates actually the total value of the goods as well as the services. In those cases, the appellants had already discharged the duty liability on the entire amount because it was not possible for them to vivisect the composi....