AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2022 (12) TMI 1047
X X X X Extracts X X X X
X X X X Extracts X X X X
....19 Dated 30.05.2018 October to March 2017 Statement of Demand Dated 16.10.2017 -do- E/86356/16 PUN-EXCUS- 002-PR.COM023 TO 03415-16 Dated 11.03.2016 October 2006 to Sep 2012 12 Pollution Control Equipments 1.2 By the impugned orders following has been held: PUN-EXCUS-001-PR.COM-013 TO 040-15-16 Dated 30.11.2015 "ORDER 33.01 I hold that the Bought Out items in these cases of the Noticee are essential and integral parts of Boilers without which Boiler Designed. Manufactured and Supplied under Contract cannot be functionable and hence value of these Bought Out items/parts procured directly at Boiler assembly site for Erection, Installation & Commissioning of same, totally amounting to Rs. 6924,78,22,485/- (Rupees Six Thousand Nine Hundred Twenty Four Crores, Seventy Eight Lakhs, Twenty Two Thousand, Four Hundred and Eighty Five Only) is includable in the transaction value / assessable value of Boilers, manufactured and supplied by M/s Thermax Babcock & Wilcox Ltd., Chinchwad (Now merged & known as M/s. TL) & M/s Thermax Ltd., Chinchwad for the period covered under 28 SC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....72,174/- (Rupees;- Eighty Eight Crores Eighty Four Lakhs Seventy Two Thousand One Hundred and Seventy Four only) i.e. Rs. 36,04,12,452/- + Rs. 52,80,59,722/- demands made against M/s Thermax Babcock & Wilcox Ltd., Chinchwad (Now merged & known as M/s. TL) & M/s Thermax Ltd., Chinchwad respectively, as detailed in Para 14.06 read with Para 31 of this Notice, against total value of Bought Out items recovered from customers amounting to Rs. 555,29,51,085/- but not included in assessable value of Boilers supplied under turnkey Contracts under the provisions of proviso to sub-Section (1) of Section 11A of CEA, 1944. 33.05 I confirm the total duty demanded in the remaining 26 SCNs issued for the period April, 2004 to September, 2015 amounting of Rs. 781,92,73,542/- ( Rupees;- Seven Hundred Eighty One Crores Ninety Two Lakhs Seventy Three Thousand Five Hundred and Forty Two only) i.e. Rs.34,10,86,464/- + Rs.747,81,87,078/- demands made against M/s Thermax Babcock & Wilcox Ltd., Chinchwad (Now merged & known as M/s. TL) & M/s Thermax Ltd., Chinchwad respectively, as detailed in Para 14.06 read with Para 31 of this Notice, against total value of Bought Out items recovered fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 above, provided they pay the entire amount as determined/ confirmed, in para 33.04 & 33.05 above, along with interest payable thereon as ordered in para 33.06 above as well as the 25% penalty, within 30 days of the date of communication of this order. 34.00 This order is issued without prejudice to any other action that may be taken against the Noticee under the provisions of the Central Excise Act, 1944/Service Tax provisions and / or the rules made there under and / or any other law for the time being in force." PUN-EXCUS- 002-PR.COM-023 TO 034-15-16 Dated 11.03.2016 "ORDER (i) I hold that the Bought Out items in these cases of the Noticee are essential and integral parts of Pollution Control Equipment without which Pollution Control Equipment Designed, Manufactured and Supplied under Contract cannot be made functional, and hence value of these Bought Out items/parts procured directly at Pollution Control Equipment assembly site for Erection, Installation & Commissioning of same, totally amounting to Rs. 603,29,74,305/- (Rupees Six Hundred Three Crores Twenty Nine Lakhs Seventy Four Thousand, Three Hundred Five Only) i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....akan, Taluka: Rajgurunagar, District: Pune, under the provisions of Rule 25 (1)(d) of the Central Excise Rules, 2002 read with provisions of Section 11AC of the Central Excise Act, 1944, as applicable, as discussed in Para 29 above, for their tax delinquency during the period from October 2006 to September 2012. (vi) However, I give an option to the Noticee, under Section 11AC(1)(e) of the Central Excise Act, 1944, to pay penalty equivalent to 25% of the total demand of Central Excise duty as determined and confirmed at Sr. No. (iii) above for the period from October 2006 to September 2012), provided the Noticee pays the entire amount of Central Excise duty as determined/confirmed above in Sr. No. (iii) above, along with interest payable thereon as ordered in Sr. (iv) above, as well as, the 25% penalty, within 30 days of the date of the communication of the order. 31. This order is issued without prejudice to any other action that may be taken against the assessee or anybody else under the provisions of the Central Excise Act, 1944 and / or the Rules made there under and / or any other law for the time being in force." PUN-EXCUS-001-PR COMMR-036-16-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssued without prejudice to any other action that may be taken against the Noticee under the provisions of the Central Excise Act, 1944/Service Tax provisions and / or the rules made there under and / or any other law for the time being in force." PUN-EXCUS=001-COMMR-003-18- 19 Dated 30.05.2018 "ORDER a) I determine and confirm differential Central Excise duty amounting to Rs.46,28,15,422/- (Rupees Forty six crores, twenty eight lakhs, fifteen thousand, four hundred twenty two only), short paid by the Assessee M/s. Thermax Limited in respect of Boilers Designed, Manufactured and Supplied under agreement / contract during the period October 2015 to March 2017 as detailed in Annexure-A to the Statement of Demand, by them under the provisions of Section 11A(1) of the Central Excise Act, 1944 read with Section 11A(10) of the Central Excise Act, 1944; accordingly order for its recovery. b) I confirm the demand of interest on the amount of Central Excise duty confirmed amounting to Rs.46,28,15,422/- as detailed in Para (a) above, at the applicable rates, and order recovery of the same from the Assessee M/s. Thermax Limited; c) I impose Penalty ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed various essential spares, bought out items / parts from various suppliers /vendor manufacturers. Without the procurement of the above said spares, bought out items/ parts, the entire Erection/Installation/Commissioning of the Boilers is incomplete. The sale of goods are completed only on Commissioning of these Machines & Equipment at buyer's works / site, as per the terms of Purchase Order / Contract. 2.5 However, while determining the transaction value of the excisable goods, these elements were not taken into account, as required under Section 4(1) (a) of the Central Excise Act, 1944 (w.e.f. 01-07-2000) read with Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. 2.6 As per the Section 4(1) (a) of the CEA, 1944, the duty of excise is chargeable on any excisable goods with reference to their value. On each removal of the goods, such value shall, in case, where the goods are sold, for delivery at the time and place of removal, and the appellant and the buyer of the goods are not related and price is the sole consideration for the sale, be the transaction value. Transaction value mean....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Rule 5, Rule 6, and Rule 8 of the Central Excise Rules, 2002, inasmuch as they failed to include, the value of essential spares/bought out items/parts, supplied directly at various sites for Erection of excisable goods i.e. Boilers, in the transaction value of Boilers manufactured and supplied by them, during the period from July 2000 to March,2015 as required under Section 4(1)(b)/4(1)(a) of the CEA, 1944 read with Rule 6 of the Valuation Rules, 2000 and failed to pay appropriate duty on the same. 2.11 The duty short-paid totally amounting to Rs. 878,26,68,076/- is liable to be recovered from the Noticees along with interest in terms of the provisions of Section 11A(1)/11A(1)(a)/11A read with Section 11AB/11 AA of the CEA, 1944, as applicable during the relevant period. It further appears that by the aforesaid acts of omission & commission, the Noticees have rendered themselves liable for penalty under erstwhile Rule 173Q/25/25(1)(d) of the Central Excise (No.2) Central Excise Rules, 2001/2002, as applicable during the relevant period. 2.12 Following Show Cause-cum-Demand Notices (SCNs) were issued to the appellant SCN Period Duty SCN To TBL C....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5,87,91,894/- 20-09-2012 01-10-2011 to 31-03-2012 8,00,14,023/- 05-04-2013 01-04-2012 to 30-09-2013 1,85,58,660/- 2.13 By the said show cause notices appellants were called upon to show cause as to why: (i) The value of spares/essential bought out items/parts & charges of Erection & Commissioning totally amounting to Rs.6971,14,65,862/- (Rupees Six Thousand Nine Hundred Seventy One Crores, Fourteen Lakhs, Sixty Five Thousand, Eight Hundred and Sixty Two Only) should not be included in the transaction value / assessable value of Boilers, manufactured and supplied by them during the period from July,2000 to March, 2015, as required under Section 4(1)(b)/4(1)(a) of the Central Excise Act, 1944 read with Rule 6 of the Valuation Rules, 2000, as applicable during the relevant period; (ii) Central Excise duty totally amounting to Rs.878,26,68,076/- (Rupees Eight Hundred Seventy Eight Crores, Twenty Six Lakhs, Sixty Eight Thousand, Seventy Six Only), short-paid by them on the said value of spares/essential bought out /parts and charges of Erection & Commissioning should not be demanded and recovered from them, unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....LT 268 (T • Thermax Surface Coating Ltd. 2002 (145) ELT 356 (T.) • Triveni Engineering & Indus. Ltd. 2001 (136) ELT 617 (T.) Affirmed by Supreme Court at 2002 (139) ELT A310 (S.C.) • Isgec Covema Ltd. 2002 (147) ELT 368 (T.) • Newton Engg. & Construction Co. 2004 (176) ELT 684 (T.) • Asea Brown Boveri Ltd. 2003 (154) ELT 493 (T.) • Elcon Clipsal India Ltd. Vs. CCE 2002 (146) ELT 360 (T.) • SAIL Vs. CCE 2016 (334) ELT 661 (T.) • Even if it is assumed that erection, commissioning & installation of boiler / other equipment at the customer's site amounts to manufacture, excisability of the same cannot be determined by Pune-I / Pune-II Commissionerate. • Silson India Pvt. Ltd. 2006 (194) ELT 37 (T.); • Madras Power Supplies 2002 (149) ELT 369 (T.); • I.T.I. Equatorial Satcom Ltd. 2001 (136) ELT 156 (T.); • L & T Ltd. - 2006 (195) ELT 116 (T.); • Jeetex Engineering Ltd. - 2001 (130) ELT 801 (T.); • Jupiter Enterprises 2014 (314) ELT 301 (T.) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) Affirmed by Supreme Court at 2006 (199) ELT A130 (S.C.) • Electronics & Controls Power Systems P. Ltd. 2011 (263) ELT 126 (T.) • T & I Ltd. 2011 (266) ELT 414 (T.) • Dalal Mckenna Pvt. Ltd. 2014 (300) ELT 259 (T.) • Siemens Ltd 2002 (150) ELT 422 (T.) Affirmed by Supreme Court at 2003 (158) ELT A74 (S.C.) • WPIL Ltd. 2022 (3) TMI 1255 - CESTAT ALLAHABAD • J. Sons & Company Ltd. 19 2019 (8) TMI 955 - CESTAT ALLAHABAD • Babubhai Narottamdas & Co. Vs. CCE 2019 (8) TMI 256 - CESTAT MUMBAI • Burden of proof is on Revenue to establish that the bought out items are essential for functioning of Boiler. • Without prejudice to above, boiler cleared from factory of the appellants is a complete boiler removed in unassembled form. • Without prejudice to above, bought out items were not essential to functioning of boiler / other equipment. Therefore, their value cannot be included in value of boilers / other equipment. • It is already settled that value of bought out items cleared directly to site of customer fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the site of Erection under their terms and the condition of the turnkey contract agreed upon with the customer.lt, therefore, follows that whether the boiler erected at the site is movable or not is immaterial and has no bearing upon the sustainability of the duty demanded in the subject notices. • Even though The appellant's vendors supply various items directly to the appellant's Customer's site on payment of central excise duty. The appellant charges their customer differently. Revenue has undertaken data analysis based on a few Commercial invoices of their vendors and the appellant's tax invoice issued to their customer. The analysis clearly indicates that vendors have charged a lesser amount. In their commercial invoice, the appellant charged a very high amount to their customers which escaped from the levy of Central excise duty. This is a clear case of undervaluation and short payment of duty on complete boilers supplied under the terms and conditions of the agreed-upon turnkey contract. Moreover, the contract agreed upon does not specify any bought-out items. • The appellant gives a warranty up to 18 months from the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ory or even direct to boiler installations site as per the instructions of the appellant for assembly of Boiler under a turnkey contract. • The appellant company is located within the jurisdiction of Pune- 1 Commissionerate. The adjudication of all the Show Cause Notices is within the competence and jurisdiction of the Principal Commissioner, Central Excise Pune - 1 Commissionerate. There is no legal infirmity in this regard. • Interest the interest is rightly invoked against the appellant. Since the demand for Tax has been upheld the demand for interest will follow. It is now settled law that interest under Section 11AA / AB was for the delay in the payment of tax from the date when it was due. the Appellant has failed to determine the correct assessable value and pay the appropriate amount of duty by the due date. Accordingly, the interest demanded cannot be faulted. • The extended period was rightly invoked by the Adjudicating Authority for the following reasons. It is clearly established that the Appellant failed to include the value of bought-out items into the value of boilers / Pollution Control Equipment during the pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the facts are that the Noticee is engaged in the manufacture of Boilers of huge sizes. He enters into turnkey Contract for the design, manufacture, supply, Erection & Commissioning of such Boilers. The pressure parts of such Boilers are manufactured in the Noticee's factory. Some parts are manufactured at the Noticee's vendors premise and brought to his factory. The parts which are manufactured by the respondents and the ones that are brought to the factory are cleared together. The Noticee clears these parts classifying them under Chapter Sub-heading No. 8402.10 of CETA applicable to Boilers on payment of duty. 17.02 The following parts of the Boilers are manufactured and cleared by the Noticee classifying them as Boilers: (a) Pressure parts of Boiler consisting of steam drum, water drum and membrane panel, ducting module, evaporator etc. (b) Economiser; (c) Super heater; (d) Heat recovery unit; (e) Structural items like ladders, chimneys and other items for holding the Boiler; (f) Pipes and tubes; (g) Flexible tubings. The Noticee receive certain parts of Boilers, such as; (a) Feed water pumps; (b) Fans; (c) Safety Valves....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... For the reasons stated above we hold that the parts removed in several consignments is a Boiler in incomplete form and therefore have to be classified under the heading meant for the complete machine, in this case under 8402.10. We uphold the contention of the Commissioner that Rule 2(a) of Interpretative Rules apply to this case." 18.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHAT ARE BOUGHT OUT ITEMS AND ARE THEY NECESSARY TO MAKE A BOILER FUNCTIONAL. WHETHER THEIR VALUE HAS TO BE INCLUDED IN THE ASSESSABLE VALUE OF BOILER DESIGNED, MANUFACTURED AND SUPPLIED UNDER THE CONTRACT WITH FURTHER CONTRACTUAL OBLIGATION OF ITSALLATION AS WELL AS SUCCESSFUL COMMISSIONING OF THE BOILER AT CUSTOMER'S SITE. 18.01 The Noticee submits that it is an undisputed fact that the goods cleared from its factory in the CKD condition are Boilers/other equipment's. It is submitted that the CESTAT order has also held that the goods cleared by the Noticee are Boilers and not parts of Boilers. Moreover, it is submitted that the said view of the CESTAT is supported by the HSN Explanatory Notes also. Thus, from the above said Explanatory Note is quite ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... CCE v. A.Z. Electronics [2001 (134) ELT 689 (T)] • Siemens Ltd. v. CCE[2002 (150) ELT 422 (T)] • Electronics Corp. of India Ltd. v. CCE[2004 (167) ELT 420 (T)] • Super Electronics v. CCE[2001 (127) ELT 302 (T)) • Cimmco Birla Ltd. v. CCE(2003 (156) ELT 1019 (T)) 18.04 Accordingly, in light of the above said judgments, the Noticee submits that as the bought out items supplied directly to the customers site are not essential integral parts of the Boilers and are merely accessories, the value of the said bought out items cannot be included in the assessable value of the Boilers. Further, it is submitted by the Noticee that it a settled position of law that the burden of proof is on the Department to establish its case beyond reasonable doubt and the Department can at no stage make allegation without strong documentary evidences. For this reliance is placed upon the following judicial precedents: • • Bharat Steel Ltd. v. CCE, New Delhi, [2009 (242) ELT 308 (Tri.)] • Mahesh Kumar Goyel v. CCE,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pollution from flue gases coming out of Boiler. 6 Feed Water Pump The function of the pumps is to continuously pump water in the Boiler which is continuously heated and converted into steam. 7 Control Valves To regulate and control quantum of water, steam, air flow etc. as per requirement. 8 Piping Carry water for supply to Boiler and subsequent piping for distribution of steam. 9 Instrumentation Automation and control of steam generating plant operating processes and safety 10 Pressure gauges Indication the pressures level at various part of the steam generating plant. 11 All type of Valves Safeguard the steam generating plant from over pressurizing during operation & avoid accidents. These are fitted on various places at steam generating plant. 12 Secondary Air System Air flow to control the furnace temperature at desired level, during Boiler operation. 18.06 From the functions of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ms are not essential parts of Boilers then why they were supplied to Boilers assembly site by the Noticee even though there was no separate orders placed on them for the same. The submissions made by the Noticee in this proceedings does not account for and answer this crucial and important question. The turnkey contract agreed upon does not specify any bought out items. It only indicates specifications of Boiler to be Designed and Manufactured. The entire responsibility of Designing, Manufacture, Supply, Erect, Install and Commission are solely cast on the Noticee. Accordingly, the Noticee have to design not only Boiler parts to be manufactured at their own factory but also other parts if they wish to get it manufactured by sub-contracting the work to other vendor manufacturers. The Notice also have to make drawings of General layout of Boiler to be installed and its piping layout and also process drawings of individual equipments and parts to be manufacture as per specifications of Boilers to be manufactured. Industrial requirement of Each Boiler and its utility vary from industry to industry and depending upon its capacity to produce steam etc design of the same vary and therefor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ined finality, re-opening and re-adjudicating the same issue would be barred by the principles of res judicata. In this regard, it is submitted that it has consistently been held in plethora of judgments that the subsequent proceedings on the same facts as contained in the earlier proceedings which have attained finality, will be hit by the doctrine of res- judicata. In light of the above, it is submitted that the proceedings initiated by the Department in the subsequent SCNS on the Heat pumps is completely perverse and is bound to be dropped as the same are hit by the principle of res judicata. 19.02 The history of the earlier case referred by the notice i.e. Show-cause-notice dated 10.03.1998 with respect to Heat Pump: 19.03 The Noticee was issued SCN dated 10.3.1998 which alleged that the goods cleared from the factory of the Noticee as heat pump is not a heat pump but a part of the air- conditioning & refrigerator equipment's and the value of lithium bromide, bought out items & accessories is required to be included in the assessable value of heat pumps. The said SCN's were adjudicated vide OIO dated 21.08.1998 wherein it was held that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authorities. In this context it is noticed that the Revenue has demanded duty on Bought Out goods cleared to site of Erection pertaining to not only Boilers but also other Equipments including 'Vapour Absorption Heat Pumps' with effect from July,2000 on wards. However, the Revenue has not included the value of 'Lithium Bromide' one of the Bought Item relating to 'Vapour Absorption Heat Pumps' for calculation of duty demand in these demand Notices on the ground that regular periodical SCN s in respect of 'Lithium Bromide' are issued from time to time. It therefore is a fact that Revenue demanded duty on other low end bought out ....... items of Vapour Absorption Heat Pumps' with effect from July,2000 onwards. Since the Hon'ble CESTAT had ruled in the case of M/s TBL (now became M/s TL) that Bought Out essential parts of Boilers and other equipments cleared to assembly site are includable in assessable value of Boiler, and CESTAT being higher forum than Commissioner Appeals, Revenue might have started issuing these demands including other low end bought items of Vapour Absorption Heat Pumps' for sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e incomplete Boilers manufactured at the factory of the Noticees and are got manufactured by the Noticees from their vendor manufacturers as per the need of Boiler design agreed to be supplied under a turnkey Contract. So these Bought Out items are essentially tailor made for the 'Boiler' being manufactured at the factory of the Noticee as a part of a turnkey Contract. Further, these Bought out items are normally cleared to the site of Noticee's customer as instructed by the Noticee. For such clearances, the respective vendor manufacturers prepare covering invoice consigned to the Noticee Companies with instruction to deliver the same at the site of Noticee's customer where the Boiler manufactured under a turnkey Contract is being installed and commissioned by the Noticees. The vendor manufacturers are in no way concerned with the customer who has placed the order for Design, Manufacture, Supply, Install and Commission the concerned 'Boiler'. The vendors receive their payments from the Noticees only and never from the customers. The invoice of the vendors accompanying these Bought Out goods to the site of Installation are collected by the site engineers/supe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of manufacture must have taken place. The Noticee submits that it enters into a turnkey Contract for manufacture, Erection & Commissioning of the Boiler with the customers. For the said Contract, the Noticee manufactures and clears the Boiler in CKD condition to the customer's site from its factory and dispatches other ancillary bought out items directly to the customer's site. The Noticee then undertakes the activity of Erection & Commissioning of the Boiler at the customers site. Further, the bought out items are erected on the auxiliary equipment erected at the customer's site. It is submitted that the above said procedure of Erection & Commissioning undertaken by the Noticee at the site of the customer does not amount to manufacturing as it is mere assembly of the Boiler dispatched in the CKD condition by the Noticee along with the bought out items directly received at the site of customer. As submitted above, the Boiler manufactured & cleared by the Noticee is complete in itself and therefore, the Erection & Commissioning of the Boiler removed in the CKD condition at the customer site along with the bought out items would not amount to manufacturing. For this reli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nnot be Commissioned. Further in all the subject cases of the Noticces turkey Contracts agreed upon with customers are composite Contracts and the SCOPE OF SUPPLY includes complete design, Engineering, Manufacture and Supply of Boilers as per the required technical specifications. For instance a Boiler cannot be functionable without parts such as feed water pump, safety valves, process valves, level gauges, Soot blowers, Dust collector, Motors.etc. It is settled law in their own case that the Noticee had removed Boilers in unassembled form at the factory site. These parts received at site are used in erection of Boilers and are necessary to make Boiler functional. Their value therefore has to be included in the assessable value. In view of these facts and circumstances of the case the Noticee's above contention that since Erection/Commissioning does not amount to manufacture and hence duty cannot be demanded on the bought out items is incorrect and misconceived and accordingly all the judgments cited in support of their contention are accordingly distinguished. 22.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE BOILER/OTHER EQUIPMENT ERECTED AT THE SITE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upreme Court has also been accepted by the CBEC Circular dated 15.01.2002. Therefore, if an item has emerged in an immovable condition and the same can be removed only after dis-assembling it into various components, no excise duty can be charged on such item. 22.02 Reliance is also placed by the Noticee on the case of Sentinel Rolling Shutters and Engineering Co.(P) Ltd. Vs. CST [1978 (42) STC 409 (SC)]wherein Hon'ble Supreme Court while considering whether a rolling shutter affixed to the building is an immovable property held that only when the shutter is fixed to the building, the rolling shutter is "born" and it becomes a permanent fixture to the premises. Thus, if an article in dispute is incapable of being shifted from one place to another without first being dismantled into its component, parts then such item is to be treated as immovable. 22.03 Reliance is also placed by the Noticee on the CESTAT decision in the case of BPL Mobile Communication Limited [2006 (198) ELT 216] wherein the CESTAT has held that setting up various components at site to form BTS (Base Transmission System) for telecommunication does not amount to manufacture of an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ectly supplied to the customers. The Central Excise Department proposed to demand duty on the entire Contract value of the weighing system installed at the site. The Commissioner of Central Excise dropped the demand and on an appeal filed by the Revenue the CESTAT rejected the appeal. The relevant portion of this decision is as under:- "This appeal is by the Revenue. The respondents were engaged in the manufacture of electronic truck weighing systems, belt weighing systems, etc., which they used to manufacture for customers like railways, coal industries, cement industries, etc. under turn-key Contracts. Under one such Contract, the respondents, during May 1985 to March 1989, installed an electronic weighing system at the customers' site. This system consisted of weigh-bridge, consoles, load cell, visual display unit, UPS, electrical surge protector and over-speed indicator, among which only consoles/data processors were manufactured by the respondents in their factory and these items were cleared to the customers' site. All other items were purchased by them. The original authority included the value of the bought-out items also in the assessable value of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tem to be a non-excisable immovable property, while holding the consoles/data processors to be excisable as automatic data processing machines under Heading 84.71, is quite in keeping with the correct view taken by the Board in its order dated 15-1-2002. 3.In the result, the Revenue's appeal stands dismissed. 23.02 The Noticee states that the above decision squarely applies to the present case since in the present case also they had manufactured certain goods at their factory and procured and directly supplied certain other goods to the sites of the customers. The case of the department in the present case is also that the Erection & Commissioning of these goods at the sites resulted in emergence of Boilers or other equipment and therefore the common proposal in the Show Cause Notices is to demand duty on the value of bought out items and Erection & Commissioning charges. In view of the above decision of the CESTAT, the proposal made in these Show Cause Notices is liable to be dropped. 23.03 It is settle law in the Noticee's own case that Erection and Commissioning does not amount to manufacture and duty demanded thereon is not s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essed by the Noticee has no relevance and application in the subject matter. 25.00 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE EVEN IF IT IS ASSUMED THAT ERECTION, COMMISSIONING & INSTALLATION OF BOILER/OTHER EQUIPMENT AT THE CUSTOMER'S SITE AMOUNTS TO MANUFACTURE, WHETHER EXCISABILITY OF THE SAME CAN BE DETERMINED BY PUNE-I COMMISSIONERATE: 25.01 The Noticee submit that in the present case, demand of differential duty has been raised by the Department by taking into account the entire value of the Boiler/other equipment as erected at the customers site. In this regard without prejudice to any other submission it is submitted that even if it is assumed that the activity of assembling, Erection, Commissioning & Installation of the Boiler or other equipment amounts to activity of manufacture, the excisability of the same can only be determined by the jurisdictional Commissioner of the location where such machine has been assembled. It is submitted that, in the present case, none of the machines which have been considered for raising the duty demand have been assembled at a location within territorial jurisdiction of the Pune-I Commissionerate.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Noticee to its customer in respect of supply of the same Boiler parts received through vendors which throw light on the relevant facts of the case. Similarly a representative sample of billing schedule in the already executed turnkey Contract of EID PARRY (INDIA) LTD with the Noticee was taken for case study and its scanned copy is also appended below. < Scanned copies deleted > 26.02 It is revealed that M/s. Thermax Ltd. Chinchwad have received following bought out items from M/s. Emerson Process Management at their project site at Nova Iron Steel, Nova (India) Pvt. Ltd. vide their Invoice No. 16406346 dated 19.12.2013 and Packing Slip No.18407208, viz Sr. No. Description/Model No. Qty Unit Price (in Rs.) Total Amount (in Rs.) 1 Pressure Transmitter 10 20732 207320/- 2 Pressure Transmitter 2 18824 37648 3 Pressure Transmitter 1 17530 17530/- 4 Pressure Transmitter 9 17530 157770/- 5 Pressure Transmitter 4 20732 87928/- 6 Pressure Transmitter 9 8310 74790/- Total Rs 59551....
X X X X Extracts X X X X
X X X X Extracts X X X X
....structed by the Noticee. For such clearances, the respective vendor manufacturers prepare covering invoice consigned to the Noticee Companies with instruction to deliver the same at the site of Noticee's customer where the Boiler manufactured under a turkey Contract is being installed and commissioned by the Noticees. The vendor manufacturers are in no way concerned with the customer who has placed the order for Design, Manufacture, Supply, Install and Commission the concerned 'Boiler'. The vendors receive their payments from the Noticees only and never from the customers. The invoice of the vendors accompanying these Bought Out goods to the site of Installation are collected by the site engineers/supervisors of the Noticee and thereafter the Noticee raise their Tax Invoice on the customer for these Bought Out goods delivered at their site by the vendors. The customer makes payment to the Noticee on the basis of such Tax Invoices. Even though these bought items are complementary goods so as to assemble the final Boiler to be supplied under the Contract as yet, for sake of convenience, the Noticee do not receive the same in its factory but they instruct vendors to delive....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith the turnkey Contract value agreed for supply of Boiler. It therefore appears that the question on recovery of cost of warranty provided to Boiler supplied under the Contract in the scope of the Noticee should only be answered by the high profit margin loaded on in the Tax Invoice of the Noticee for the so called Bought Out goods used in assembly of final Boiler at site. It is noted that even though Central Excise Duty has been discharged by the vendors at the time of dispatch of goods as yet, the differential value loaded on the same by the Noticee while raising Tax Invoice on its customers has definitely escaped from levy of Central Excise Duty thereon as only reimbursement of Central Excise Duty paid by the vendors is shown therein and thus it may amount to under valuation and short payment of duty on the complete Boiler supplied under the terms and conditions of turnkey Contracts agreed upon. 26.07 Design and Drawing charges: Similarly, it is settled law that the design and drawing charges incurred in manufacturing should be included in the assessable value of the finished goods for discharging the Central Excise duty payable thereon. It is reve....
X X X X Extracts X X X X
X X X X Extracts X X X X
....endors is also to be treated as on their behalf and therefore in the interest of fair play and justice the amount equivalent to duty payable/paid on the Bought Out goods sent direct to site so as to facilitate assembly of Boiler, will have to be treated as part discharge of duty liability by the Noticee on par with Cenvat credit of the same which otherwise would have been available for utilization on its receipt in the Noticee's factory premise. Thus it reveals that after such adjustments, a differential duty on the net differential value of Bought Out goods delivered direct to site on behalf of the Noticee remained unpaid as neither the vendors knew about it/considered such additional value recovered on the goods for payment of duty nor the Noticee discharged the same while raising invoice including such extra recovery from its customer with whom turnkey contract for supply of Boilers was agreed upon. ..... 32.0 In view of the above discussions, findings it may be summarized as under: I. It would be correct to issue a common adjudication order against all the subject 28 nos. of Show Cause cum- Demand Notices issued not only against M/s. Thermax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....002 but for its non availability for the same. IX. The Noticee's action of non-inclusion of value of Bought Out Goods which are essential and integral part of Boilers supplied in the assessable value of Boilers Designed, manufactured supplied Installed and Erected at Boiler site of the customer under the terms and conditions of turkey Contract agreed with its customers resulted in deliberate avoidance and evasion of duty due thereon. X. The Noticees are liable for penalty under the provisions of erstwhile Rule 173 Q of Central Excise(no.2) Rules,2001/2002,Rule 25(1) (d) read with Section 11AC of the CEA,1944, for having contravened the provisions of Section 4(1)(a)/4(1)(b) of the CEA, 1944 read with Rule 6 of Central Excise Valuation Rules, 2000. 4.3 In crux we find that the only issue that needs to be discussed in the present case is in respect of addition of the value of Brought Items to the assessable value of the goods manufactured and cleared by the appellant. In para 18.05 of the impugned order, various brought out items have been listed along with the functions. After recording this findings the Commissioner has concluded that these are e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l these are attached to boiler and will work wholly or partly under pressure. Water at very high pressure is fed to the boiler by feed pump. Heat addition takes place in boiler wherein the water is converted into steam. To increase the efficiency, the steam has to be generated at higher pressure and higher temperature, which is done by the Economisers initially. The steam is further heated by Super Heaters and re-heaters to a high temperature ranging upto 540 deg. C or above depending upon the design parameters. Economisers, Superheater, Re-heaters essentially consists of tube bundles whole sole purpose is to heat the steam further to increase its efficiency. To monitor the system more effectively, various instruments are used to measure various parameters like pressure, temperature, flow of the media in various sections of the boiler. Control Systems are used to ensure that these parameters are within the limits for safe operation. Components like E.S.P. Fans, Control Equipment constitutes auxiliary/ accessories of Boiler and are not essential constitutes of Boiler, Even without these, a complete boiler will come into existence. It is thus clear....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Revenue. HSN note Part V under Section XVI : "For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine having the features of the complete machine (see Part IV), presented unassembled (see also in this connection the General Explanatory Notes to Chapters 84 and 85). However unassembled components in excess of the numbered required for a complete machine or for an incomplete machine having the characteristics of a complete machine, are classified in their own appropriate heading." 6. Insofar as the particular assessment is concerned, from the report of the expert as extracted above, it is clear that the said expert had suggested that the respondent-assessee should be asked to file separate list of the parts which are essential for the boiler and other parts which are used in the boilers but which are not essential parts thereof. 7. We do not know as to whether the aforesaid exercise has been carried out by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... view of the above, we set aside the order impugned and allow the appeal." Similar view has been expressed by the CESTAT in the case of Greysham & Co [2014 (304) ELT 129 (T-Del)] stating as follows: "3. We have considered the submissions of the learned DR and have perused the records. The undisputed facts are that the appellant manufactured certain Air Brake Equipments and cleared the same from their factory to Integrated Coach Factory, Chennai of the Railways. Pipes and pipe fittings of the Air Brake systems were bought from the outside and supplied separately to the ICF, Chennai and thereafter the goods manufactured and cleared by the appellant along with bought out pipes and pipe fittings were installed in the Railways Coaches as Air Brake Systems. In our view since what had been manufactured and cleared by the appellant was Air Brake Equipment and this is not a case of where bought out items had been brought to the factory for use in the manufacture of the final products, the value of bought out items would not be includible in the assessable value. Similarly the installation of the Air Brake equipment has nothing to do with the manufacture of the equipments a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he plants were also erected at the site by assembling the above 4 items and bought out items by assembling by the third party. The appellant has never supplied plant in toto. Therefore, the value of bought out items are not includible in the assessable value as same are neither spare parts nor accessories to the items manufactured by the appellant. The decision of Narne Tulaman Manufacturers Pvt. Ltd. (supra) is not applicable to the facts of this case as in that case the manufactured goods and bought out items were cleared from the factory and the final product assembled from such duty paid items. In that situation, the Hon'ble Supreme Court held weigh bridge are dutiable. The decision of Mahindra & Mahindra (supra) is also not applicable to the facts of this case as in that case Tribunal held that fabrication of steel structures like roof frame and sheds amounts to manufacture whether the same are fabricated at customers place. In the present case Nitrogen/Oxygen Plants were assembled at the customers place i.e. factory of the manufacturer not by the appellants. Therefore, the appellants have not supplied the plants to their customers." 4.6 Undisputedly the goods which have be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ectly at the site of assembling. The decisions cited by the ld. Counsel on the preposition which are enumerated in Paragraph 3 are directly on the point and on the question of jurisdiction itself the appeal of the appellant succeeds and the demand of Excise duty raised in respect of sizing machines is liable to be set aside." We are also in agreement with the submission made by the appellant that if the goods as erected at site are held excisable then they will be exempted as per the notification No 67/95-CE. 4.8 Tribunal has in the case of the Appellant [2005 (182) E.L.T. 336 (Tri. - Mumbai)] themselves has held as follows: "6. Heard both sides. (a) Whether the goods as cleared by the respondent is classifiable as boiler under sub-heading 8402.10: We observe that the HSN explanatory note at page 1240 under heading 84.02 says that economizers, air pre-heaters, superheaters, de-super-heaters steam receivers, steam accumulators, soot removers, water tube, fire-box walls, and other apparatus of accumulation etc. are auxiliary item supplied along with the boilers. These auxiliary item increase or regulate the output of a boiler or its efficiency. But th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or erection of a boiler and therefore the value of the bought out item form part of the assessable value. The fact that no processing was done on the bought out items and that no credit is availed is immaterial according to revenue. 8. The respondents argue that the bought out items are in the nature of accessories and not parts of boiler manufactured and supplied by them. Boiler is complete without these bought out items. The respondents relied on CBEC order No. 4/92 issued under Section 37B in this regard and on the decision of the Tribunal in the Shrike Construction Equipments Pvt. Ltd. v. CCE, Pune [1997 (95) E.L.T. 644 (Tribunal)]. 9. We observe that the respondents reliance on the CBEC order cited supra is misplaced. The said order does not relate to the present issue that is whether the value of bought out items is to be added or not. The decision in Shrike Construction Equipments Pvt. Ltd. case does not decide the issue of inclusion of value of bought out items. The Revenues' contention that without these parts a boiler cannot be commissioned appears to be correct. For instance a boiler cannot be functionable without parts such as feed water pump, safety v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cites judgment reproduced in 1994 (71) E.L.T. 508 in support of his argument. We find that this was considered by the Tribunal in the cited judgment of A.Z. Electronics and was not adopted. 4. In the Jeetex Engineering Ltd.'s case the Tribunal had mentioned that the price would not be included where the batteries were not supplied from the manufacturer's factory and were directly installed at the Customers premises. Shri Umashankar stated that such distinction was made only on the ground of commercial expediency and that the result was the same where batteries were supplied from the manufacturer's premises or were supplied to the buyers premises from the other source. We find this argument not acceptable since the Tribunal in the earlier cited judgment had made the decision on this ground." It is noted that Presiding Member in the bench which has decided the case of Siemens was same as the Presiding Member in the appellant case referred above. This judgement has been maintained in the Apex Court as reported at [2003 (158) ELT A 74 (SC)]. 4.10 Appellant challenged the order in their case before Hon'ble Supreme Court and disposing of the appeal filed by the Appellant, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in respect of the brought out items in the show cause notice. Commissioner has in the impugned order not recorded any finding in this respect in the impugned order, as to whether any demand was made in the show cause notice in that case or not. Hence we do not find any merits in the sole reliance placed in the impugned order on the said decision of the tribunal and Hon'ble Supreme Court. 4.11 In the case of Appellant Hon'ble Supreme Court has in order as reported at [1998 (99) E.L.T. 481 (S.C.)] held as follows: "8. Shri V. Lakshmikumaran, learned Counsel appearing for the appellants contended that the decision of the Tribunal as also that of the Assistant Collector insofar as they relate to the inclusion of drawing and designing charges in the assessable value of the Boiler are not challenged but the decision relating to the inclusion of erection and commissioning charges in the assessable value of the Boiler installed by the appellants at the customers' site is positively wrong and is liable to be set aside. It is contended by him that before manufacturing the Boiler, the officials of the appellants visit the site at which the Boiler is to be installed and, ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is assigned it would result in bringing in its ambit structures, erections and installations. That surely would not be in consonance with accepted meaning of excisable goods and its exigibility to duty." 13. In view of the above, the judgment passed by the Assistant Collector as also by the Tribunal that installation and commissioning charges have to be treated as assessable value of the goods supplied by the appellants are not correct and are liable to be set aside. Since we are disposing of these appeals on merits on coming to the conclusion that the installation and commissioning charges could not be included in the value of the goods, the question of limitation relating to the show cause notice issued under Rule 9(2) read with Section 11A of the Act for the period from 1982-83 to 1987-88 is not decided." 4.12 Further in the case of S S Engineers [2019-TIOL-1124CESTAT-MUM], in similar situation a coordinate bench of tribunal held as follows: "6. We have carefully considered the submissions made by both the sides and perused the records. We find that some of the show cause notices were issued on the ground that the value of bought out items supplied by the Ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sult into emergence of new product i.e Boiler. The Appellant do not clear the Boiler in Complete knocked down Condition or Semi Knocked Condition. The Appellant's own manufactured goods, at the time of clearance from the factory, have identity of individual components or equipments which has not been disputed by the revenue. Though the adjudicating authority held that the bought out items are critical components of the Boiler but we find that even not a single bought out component has been named as critical component which shows that the allegation has no basis. Simply by alleging that the value of bought out goods are liable to be included in the assessable value, duty cannot be demanded. Even though the show cause notice mainly alleged that the bought out items are liable for duty but in the impugned order the demand has been made on whole contract price which shows that the demand has no basis. Nevertheless we find that the 80 TPH Boiler on the basis of which demand has been confirmed against the Appellant is a huge structure which was erected at site and is permanently attached to earth. It was erected piece by piece and not by merely putting some goods together viz. the Appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... bought out goods is concerned we find that when the bought out goods are not being part of any excisable goods at the time of their clearances in that case no duty can be demanded. In case of M/s Intech Surface Coating Pvt. Ltd. Vs. CCE, Pune - III, this bench on the issue of inclusion of bought out items in the assessable value has held as under : "We have gone through the rival submissions. We find that it is not in dispute that the Revenue is seeking to include the cost of bought out items supplied directly to site for the purpose of charging Central Excise duty. It is not in dispute that no manufacturing activity in respect of such items has been done by the appellant. The liability to Central Excise duty arises only when there is a manufacturing activity undertaken and in the absence of manufacturing activity the liability of Central Excise does not arise. On a similar issue in the case of Acer India Ltd. (supra) observed as follows: 55. It must be borne in mind that central excise duty cannot be equated with sales tax. They have different connotations and apply in different situations. Central excise duty is chargeable on the excisable goods and not o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dders, Working Platforms, Railing Shed for Trolley, Two (Motion) Cane Unloader Bridge, Trolley (complete with CT Drive, Hoist & Holding Drums, Wire Ropes, Spur Gears Gear Boxes, Motors, Brakes, Trusters, Limit Switches etc.) with sling attachment, Electrical Control Panel, Operator's Cabin etc. including electrical hardware 2 Cane, Rake and Baggase Carriers Columns, Side Plates, Runner Beams, Runner Hooks, Chutes, Rake, Staircase, all Sprockets & Shafts with Plummer Blocks, Bearings, Stretching Gear, Idler Pulleys with Shafts, Brackets, Bush Bearings, Chain for 1st Cane Carrier, Slats, Motor with variable speed drive, Reduction Gear Box, Spur Gear, Pinion Set, Starter. Base Frame. Foundation Bolts for Cane Carrier Drive. Troughs Rakes, Chain, Runners, Service Gangway, Tensioning Devices, Set of Bagacillo Collecting Hopper with Bagacillo Screens and Sliding Door for feeding bagasse to boilers 3 Cane Kicker Central Shaft, Knives, Plummer Blocks & Bearings, Drive Base Frame, Motor with Starter Reduction Gear Box, Coupling etc. 4 Cane Leveller Shafts & Hubs, Flywheels, Bearing & Plummer Blocks. Couplings, Set of nuts & bolt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Drive, Mud Tank, Clear Juice Column, Set of Valves, Pipes, Wheels, Chairs etc., Working Platform, Railing, Ladders 10 Vacuum Filters Vacuum Filter complete with drive, Filterate Receiver, Mud Belt Conveyer including supporting structure at the Mud Discharge End, Mud Mixer, Catchall installed in the line going to condenser. 11 Evaporators Calandria with bottom saucer for 2000 M2 H.S.A, body semi-kestener (1st body). Calandria with, bottom saucer for 1000 M2 H.S.A. body semi-kestener (2nd A body), Calandria with bottom saucer for 600 M2 H.S.A. body semi-kestener (2nd B body), Calandria with bottom saucer for 450 M2 H.S.A. body semikestener (3rd body), Calandria with bottom saucer for 250 M2 H.S.A body semi-kestener (4th body). Body of Evaporator, Catchall for Evaporator. A set of incondensibles collecting coils, syrup/juice samples etc 12 Vacuum Pans Calandria for 60 T. vacuum pan with bottom saucer. Body for 60 T vacuum pan, Catchall for vacuum pan. Pan Discharge Valve complete with operation mechanism, Set of pan washing coils, feeding headers and all other pan accessories 13 Grass Hopper Plain Tray-Grass Hopper, Multi Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....parts, the goods would be considered as immovable and therefore not exigible to duty. The clarification has been issued in the light of the Apex Court's judgment cited supra as well as in the case of Quality Steel Tubes Pvt. Ltd. v. CCE, 1995 (75) E.L.T. 17 (S.C.) and Mittal Engineering Works Pvt. Ltd. v. CCE, 1996 (88) E.L.T. 622 (S.C.). 4. The Commissioner has relied upon the decision of the Tribunal in CCE, Chennai v. Binny Ltd., 2003 (151) E.L.T. 106, holding that similar items were excisable, however, as rightly pointed out by the learned counsel for the appellants, the assessees did not challenge the Commissioner's order treating some of the sugar manufacturing equipment as movable and hence excisable, for the reason that the demand was dropped on the ground that it was barred by limitation and hence the finding of excisability was not contested by the assessees. 5. In the light of the above discussion, following the ratio of the apex j court's decision in Triveni Engg. & Inds. Ltd. supra, on the basis of which CBEC Circular No. 58/1/2002CX., dated 15-1-2002, which is binding on the Revenue authorities, was issued, we set aside the demands and penalties and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... erection of immovable property. It itself is not clear as to what were the bought out items. Clearly the whole demand is fallacious. In case of Walchandnagar Industries supra the goods cleared were in assembled form and were excisable goods before their clearance from the factory. In case of Frick India Ltd., the issue involved was whether the value of bought items is includible in the value of Compressor whereas in the present case the issue is demand of duty under the guise of bought out goods which itself is not clear and even the goods coming into existence at site does not merit consideration as excisable goods. Thus we find that all the judgments cited by the Appellant does not have any effect on the present controversy. whereas the Appellant's case for the previous period stands decided in their favour. We also find that even if it is assumed that any duty is demandable from the Appellant, it would not be liable to be paid as the alleged activity of installation of goods took place at the factory of customer and hence they are eligible for exemption in terms of Notification No. 67/95 - CE. 9. The adjudicating authority has confirmed duty demand on the contrac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t involve any manufacturing activity of LPG Bullets. All other activities such as fitting out of the bought out items and erection & installation is taking place at the site of the customer. All these activities are carried out to make the LPG Bullets as immovable goods, therefore, all such activities are not part and parcel of the manufacturing activity of the appellant in respect of LPG Bullets. Therefore, inclusion of any amount over and above the price of the LPG Bullets adopted for clearing of the goods from the factory is incorrect and without authority of law. In support, she placed reliance on the following decisions:- a) Triveni Engineering & Indus Ltd. - 2000 (120) ELT 237 (SC) = 2002-TIOL-14-SC-CX b) Milestone Aluminium Co. Pvt. Ltd. - 2007 (214) ELT 417 (T) c) Sanmar Weighing Systems Ltd. - 2005 (190) ELT 228 (T) = 2005- TIOL-1298-CESTAT-MAD d) Emerson Network Power India Pvt. Ltd. - 2004 (176) ELT 168 (T) e) Fuse Base Eltoro Ltd. - 2000 &116) ELT 179 (T) f) Goetze (India) Ltd. - 2004 (169) ELT 274 (T) = 2004-TIOL-366- CESTAT-DEL g) Kerala State Electronic Dev. Corpn. - 2008 (224) ELT 88 (T) = 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y to the site and certain bought out items are also directly supplied to the site from various vendors, on payment of duty. It is a fact on record that boiler in question emerges at site which become an immovable property, which is not excisable goods therefore, not leviable for duty. As the Boilers on which the Revenue is demanding duty are not excisable goods therefore, the question of payment of duty does not arise. Further, we find that bought out items have never came to the factory of the appellant and the appellant is liable to pay duty only on the goods manufactured by them. In that circumstance, for the bought items, the appellant is not required to pay duty. Therefore, we hold that demands in the impugned orders are not sustainable. Accordingly, the impugned orders are set aside." (ii) Tycon Automation Pvt. Ltd. Vs. Commissioner of Central Excise, Noida- 2017 (357) ELT 861 (Tri.-All) "6. Having considered the rival contentions. We find that it is an admitted case of Revenue that the appellant have not brought the bought out items in their factory of manufacture and it is further admitted fact that the control panels are not cleared along with bought out ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ral Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts - (i) capital goods as defined in rule 57Q of the Central Excise Rules, 1944 manufactured in a factory and used within the factory of production; (ii) goods specified in column (2) of the Table hereto annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to manufacture of final products specified in column (3) of the said Table; from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) : Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zone or to a 100% Export Oriented Undertaking or to a unit in an Electronic Hardware Technology Park or to a unit in a Software Technology Parks), which are exempt from the whole of duty of excise leviable thereon or are chargeable to 'Nil' rate of duty. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te is not excisable goods having immoveable, however, even if it is assumed that revenue's contention of excisability is correct, the goods coming into existence at site which is well within the Sugar Mills shall be eligible for exemption Notification No. 67/95-CE. Hence on this count also the demand does not sustain. Accordingly we hold that no duty is demandable from the Appellants on merits. 12. The Appellant has pleaded that the demand is time barred. We find from the records that the facts were in the knowledge of the revenue since very beginning and even earlier to the demand confirmed against the Appellant which was eventually set aside by the Tribunal. The said order passed by Tribunal reported at 2008 (221) ELT54 was upheld by the Hon'ble Mumbai High Court. In such facts, we find that there is no ground to raise demand by invoking extended period of limitation as there is no suppression or malafide intention on part of the Appellant. Thus in our above observations and findings on fact as well as on the basis of orders passed by the Tribunal, Hon'ble High Court and Hon'ble Apex Court supra we do not find any reason to demand duty from the Appellant. We thus h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... On this factual matrix, we find that the judgment of the Tribunal in the case of Cheema Boilers Limited (supra) and followed in S.S. Engineer (supra) is comprehensive, covering the issue in the case in hand. In the case of S.S. Engineer, the Bench also considered the very same judgment of Hon'ble Apex Court in the case of Thermax Bobcock & Wilcox Limited and Lipi Boilers Industries Limited [2011(263) ELT 271 (Tri.-Mum.)] (on which case, learned Principal Commissioner (AR) has relied upon) and has distinguished the facts as stated herein above. In para 8, in the case of S.S. Engineer, the Tribunal (6) Appeal No. E/1456/2011 has brought out very clearly that in case of bought items which are cleared to the customers site directly and in turn used for erection of immovable properties, the demand becomes totally incorrect or fallacious. For this purpose, the Tribunal relied on the cases of Walchandnagar Industries Limited [2014(311)ELT 274] and Frick India Limited [2007(216)ELT 497 (SC), these we find that the same judgments which are relied upon by the adjudicating authority in this case and dropped the proceedings, initiated by the show cause notice. It is undisputed, in the case in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h is not excisable. Tribunal has in case of Babubhai Narottamdas & Co [2019 (8) TMI 256 - CESTAT Mumbai] held as follows: "10. The Hon'ble High Court in the case of Larsen & Toubro (supra) was confronted with the question whether fabrication, assembly and erection of waste water treatment plant at the site of the assessee resulted into manufacture of excisable goods, accordingly chargeable to duty. Analyzing the evidence on record, the Hon'ble Court observed as follows:- "5. It need not be stated that the excise duty is not payable in respect of an immovable property. The plant when erected by embedding in the civil work becomes an immovable property and would not therefore attract any excise duty. The contention of the respondents, however, is that the plant came into existence in an unassembled form at site and became operational after it was embedded in the civil work. Though the civil work did not attract excise duty, excise duty was payable on the plant in an unassembled form. The relevant wording in the show cause notice in that regard is quoted below :- "The plant already came into existence in an unerected form as per drawing and designs approved ....