TaxTMI 
TaxTMI 
2019 (5) TMI 870
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....Pvt. Ltd (HMIPL) and M/s India Yamaha Motors Pvt. Ltd (IYMPL) and M/s Jit Industries. The Appellant after manufacturing of such goods are clearing to the above buyers without affixing any MRP and assessing the same in terms of Section 4 of Central Excise Act. The buyers in turn affix MRP on said items and pay appropriate duty in terms of section 4A. The goods manufactured by M/s RC have been classified by them as accessories of two wheelers under chapter sub heading 8714 1090. The Appellant during the manufacture of such goods, is also getting some of the processes done from the job workers, for which they are sending the inputs on challans to the job workers. Based on the investigation, M/s RC were issued show cause notice dated 29.05.2014 wherein it was alleged that the goods are parts of the two wheelers and the valuation of the same for the purpose of payment of duty has to be done under Section 4A of the Central Excise Act, 1944 and in terms of Serial No. 108 of Notification No. 49/2008-CE (NT) dated 24.12.2008. The Show cause notice proposed to demand duty of Rs. 3,53,79,488/- on account of differential duty. The show cause notice also alleged that the goods shown to have bee....
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....ed and cleared as per specification and requirement of M/s HMIPL and M/s IYMPL on the price agreed upon between themselves and duty is paid on the transaction value. The word 'component' mentioned in Notification No. 49/2008 is also akin to the word "assemblies". "Component" means a constituent part as held in Star Paper Mills Vs CCE 1989 (4) SCC 724 = 43 ELT 178 (SC). Similar view has been expressed in CBEC in its circular No. 666/57/2002/CX dated 25.9.2002. 'Parts', 'Components' and 'Assemblies' used under Notification covers the 'elements', which fall in the same family and the family in itself is a family of 'parts'. Whereas against the phrasal words, i.e. 'parts', 'components', and 'assemblies', the word accessories carried altogether a different meaning and its different in its use and importance. Meaning of "Accessory" according to Webster Comprehensive Dictionary, International Edition is person or thing that adds subordinately an adjunct, appurtenance, and accompaniment." The Hon'ble Tribunal in case of Siddharth Tubes Ltd Vs CCE - 2000 (120) ELT 679 (Tri) has expressed that an "Accessory" is an "extra" thing added to help something or more importance, sub-ordinate or non ....
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...., it may at best be termed as 'accessory of automobile'. Accessory of an automobile is not covered in the Notification No. 11/2006-C.E. (N.T.). Therefore, such accessories of two wheelers are not to be assessed on MRP. He places reliance on the following case laws: • Ranpur Inds Vs CCE, Ahmd - 1999 (108) ELT 495 (Tri) • Indichem Vs UOI - 1996 (88) ELT 35 (Guj) • Intel Design Sys, India Vs CCE -2008 (223) ELT 135 (SC) • Qazi Noorul HHH Petrol Pump Vs Dy. Director -2009(240)ELT 481 (SC) • CIT, Kerala Vs. Tara Agencies - 2007 (214) ELT 491 (SC) • Amrit Paper Vs. CCE, Ludhiana -2006 (200) ELT 365 (SC) • Goldstone Engg.Ltd Vs UOI -2005 (181) ELT 11 (AP) • UOI Vs Kanunga Inds -2004 (178) ELT 19 (SC) • Perfect Electric Concern Pvt Ltd 1997 (93) ELT 622 (Tri) • Carrier Aircon Ltd -2006 (199)ELT 577 (SC) • Ratan Melting & Wire Ind. -2008 (231) ELT 22 (SC) • Pragati Silicon Pvt. Ltd vs CCE -2007 (211) ELT 534 (SC) • GS Auto International vs CCE, Chandigarh -2003 (152) ELT 3 (SC) • Escorts Ltd vs CCE, Delhi -2002 ....
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....nd is without any basis . They do not have the facility for carrying out operations, viz. powder coating, metal polishing and therefore they are sending the raw materials / semi finished goods under delivery challan and after such process is carried out, the processed goods are returned back to the factory premises for its final clearance. All the inputs sent for job work were issued under challans and the same were returned under the cover of challan and invoice from the job workers. The payment of job-work charges is made to the job-worker by account payee cheques only. The preventive officers did not verify any such facts at the job workers end nor recorded any statement of job workers. Even the fact is that the job workers had informed the preventive officers that they had undertaken job work for the appellant but the same was not taken on record. The Appellant had accounted for all the goods cleared and received back from the job workers in the form and they had submitted a work sheet which showed that the goods were sent to job worker and the goods returned from the job worker were finally cleared on payment of central excise duty to our customers. The Adjudicating authority ....
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....pports the findings of the impugned order. 8. On the other hand Shri Sameer Chitkara Ld. Additional Commissioner (AR) appearing for the Revenue submits that the goods viz. rear guard with W fitting, side panel, front bumper / front guard assembly, nuts & bolts for fittings are integral part of two wheelers and constitute the safety parameters of two wheelers. The goods are indispensible to the two wheelers and therefore, are in the nature of parts. They are manufactured by the assessee as per drawings and specifications provided by M/s HMIPL and therefore, automatically become parts of two wheelers. Therefore, the goods manufactured by the assessee are liable to be valued under Section 4 (A) of the Act in terms of Notification No. 49/2008-CE (NT) dated 24.12.2008. The goods manufactured and cleared by the assessee were intended for retail sale to the ultimate consumer and were not meant for consumption by HMIPL. They were merely carrying out the process of re-packing and labeling of the goods for further sale to the distributors, dealers and ultimate consumers, at best be referred as agencies or other intermediaries for the sale to be termed as retail sale. The Appellant is not ....
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....ce the goods were cleared on challan, the duties are applicable. 10. Heard both the sides and perused the records. As far as valuation of goods for the purpose of assessment, the assessees' contention is that the goods being accessories of two wheelers are liable to duty under section 4 i.e. on transaction value whereas the revenue is demanding duty under Section 4A i.e. on MRP basis that the goods are parts of two wheeler and hence liable to MRP based duty in terms of Notification No. 49/2008- CE (NT). The impugned goods, i.e. Front guard Assy - Block, Front guard - Kit, Leg Guard, Footrest step, Round RR Guard, Kit-guard Activa, Rear guard with W fitting, Side panel, Front bumper with nuts and parts are being cleared by M/s RC to M/s HMIPL and IYMPL or Jit Industries on payment of duty under Section 4 of Central Excise Act without affixing any MRP. The buyers in turn are clearing these goods to their dealers after affixing MRP, who in turn sell these goods to the customers as per the choice and willingness of the customers. It is also a fact that the impugned goods are not cleared by M/s HMIPL/ IYMPL and M/s Jit after putting them on Two Wheelers as they are not manufacturers ....
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....ories' and the two cannot be equated under the subject notification No. 49/2008. Since only 'parts, components, and assemblies' of a vehicle are covered under the Notification and hence it has no application in case of accessories. It is also a fact that M/s RC are clearing the goods to the parties who are not retail customers nor they are manufacturers of Two Wheelers, but are engaged in the marketing of accessories of two wheelers after removing the same from bulk pack i.e. packing of four or six and then after affixing MRP are clearing for retail sales to dealers who as per the customer order are putting it on two wheelers. Clearly when the accessories are not being cleared with two wheeler nor are required to be put on vehicle and it is only customer to customer choice that the same are put on vehicles, these items do not qualify as parts/ components or assemblies. Thus it is a fact that the two wheelers are capable of functioning without these accessories. The Hon'ble Supreme Court in case of Pragati Silicon Pvt Ltd - 2007 (211) ELT 534 (SC) held in para 12 of the order, as under :- "Para 12.The Tribunal has answered the above question in the negative. Significantly, ....
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....e 2 (k) of the said rules defines "Retail Sale" to mean - "retail sale "in relation to a commodity, means the sale distribution or delivery of such commodity through retail sales, shops, agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer." Rule 2 (1) of the said rules defines 'Retail Sale Price' to mean: "the maximum price at which the commodity in packaged form may be sold to the consumer and the price shall be printed on the package in the manner given below." 14. As per explanation of above Notification 49/2008-CE (NT), retail sales price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight charges, commission payable to dealers and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and sale price is the sole consideration for such sale. Thus it can be seen that the retail sale price is defined with reference to sale to the ultimate consumer only whereas the industry or institutional consumers are not ultimate consumers. As per the a....
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....NT) dated 1.3.2006 the Notification No.49/2008-CE (NT) dated 24.12.2008 was amended so as to change the description of the goods covered under Sl.No. 108 of the Notification No. 49/2008. By the said amendment, the entry was amended to read as "parts, components, accessories & assemblies" whereas before this date, the entry read as only 'parts/components and assemblies'. It is, thus apparent that before 2016, the accessories were not covered under the subject notification. If the contention of the revenue that parts/components/assemblies cover accessories, then there was no need to add accessories by above amendment. The amendment of entry itself recognise the accessories different from the terms parts, components and assemblies. Therefore with the aforesaid amendment, the entire contentions of the revenue clearly fails. 16. In view of our above observations we hold that the impugned goods are not components, parts or assemblies of the Two Wheeler but are accessories of two wheelers and hence not liable for valuation in terms of Section 4A and Notification No. 49/2008 - CE (NT). Further that the goods were at the time of clearance from the factory of M/s RC were not intended to b....
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....the investigating officers had any doubt about the job work activities or the job worker they should have investigated the some further. The charges of clandestine removal has to be investigated and proved and cannot be merely alleged on the basis of incomplete challans or records. No buyer of such goods which were inputs or semi finished goods has been found. No statement of any job worker is appearing on record and no evidence except job work challans are appearing on record. In absence of any buyer and receipt of any consideration it cannot be said that any goods were removed by RC. No discrepancy in stocks has been shown to have occurred. The allegation lacks any corroborative evidence and hence the demands are not sustainable. In case of demand of Rs. 75,976/- and confiscation of goods we find that the same has been ordered on goods which were to be cleared under invoice no. 55 dated 02.12.2013 and 56 dated 04.12.2013. The adjudicating authority has held that the said goods were not accounted in the records and were also cleared without assessing the same under section 4A. We find that at the time of the visit of the officers the invoice for clearance of goods were found to ha....