TaxTMI 
TaxTMI 
2023 (4) TMI 709
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....attice mast manufactured by the appellant are cleared in the domestic market on payment of excise duty as well as are cleared for export. In some cases, the customers who buy lattice mast manufactured by the appellant for their convenience, also place orders on the appellant for supply of Winches, NN Wire Rope, Electric Motor, Control Panel, Eight fixture etc. (hereinafter referred to as the "bought out items) to be used by the customers for erection/commissioning of High Mast Tower. In some cases, the customers also place purchase orders on the appellants for supply of bought out items only. The appellant purchase the bought out items either from the manufacturer or the traders. The appellants do not take Cenvat credit of excise duty paid on such bought out items as they are not used for manufacture of their finished goods. The appellant are paying VAT/CST on such sales. However, in few cases where customer requires appellant to supply Arm Brackets which are to be fixed on poles, value of such Arm Brackets is included in the assessable value and excise duty is paid as they are part and parcel of the manufactured pole. Periodical show cause notices were issued to the appellant prop....
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....i) (c) Kores (India) Limited vs. CC - 2014 (303) ELT 83 (Tri. Mumbai) (d) CCE Vs Ingersoll Rand (India) Ltd 1999 (105) ELT 549 (SC) (e) Sur Iron & Steel Co. (P) Limited vs. CCE - 2018 (363) ELT 373 (Tri. Kolkata) (f) CCE vs. Thermax Limited - 2009 (235) ELT 737 (Tri.Mumbai) (g) CCE VS Sterlite Industries (I) Limited vs. 2006 (195) ELT 231 (Tri.Mumbai) (h) CCE vs. Ravi Krishna Castings Limited - 2004 (176) ELT 556 (Tri. Bang.) (i) Emerson Network Power India P. Ltd vs. CCE - 2004 (176) ELT 168 (Tri. Mumbai) 3.1 Without prejudice to above submissions he further submits that in any event of the matter, the so called High Mast Tower is emerged at the site of the customers, the appellant are not manufacturer of High Mast Tower. The show cause notices have been issued without any jurisdiction therefore, the impugned orders are not sustainable and demand raised in the aforesaid show cause notices are liable to be set-aside. The proceedings have been initiated assuming that appellants are manufacturing High Mast Tower. Though incorrect, however even if this assumption is taken to logical end even then admitted factual position is that the High Mast Tower had emerged at the s....
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.... paid only on the lattice mast and not on the accessories. This is clear from the ARE-1 filed with the department. Since, the merchant exporter issued CT-1 for higher excise duty element, therefore, later-on, the merchant exporter requested the appellant to get the non-utilisation certificate for the remaining amount of CT-1 amount. As per the instructions of the merchant exporter, the appellant requested the Superintendent, Central Excise, Range-V, Silvassa to issue non-utilisation certificate. The correspondence in this regard have been annexed with the appeal memo. From the said documents it is clear that the fact of payment of excise duty only on lattice mast and not on the bought out items was well within the knowledge of the department. Therefore, the demand for the extended period is incorrect. He placed reliance on the following judgments:- (a) CCE vs. Punjab Chem & Pharm - 2001 (135) ELT 227 (T) (b) Asia Automotive Limited vs. CCE-1999 (113) ELT 841 (c) Nadiad Silicate & Chem vs. CCE-1995 (80) ELT 891 (d) Haryana Co-op. Sugar vs. State-1997 (107) STC 103 4. Shri Ghanasyam Soni, learned Addl. Commissioner (AR) appearing on behalf of the Revenue reiterates the findi....
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....es and its wattage is decided and installed. Rate also varies from brand, wattage and capacity of the fixtures. There are more than thousand types of different electrical fixtures available in the open market. These are mounted on the top of the mast with the help of Lantern Carriage for illumination. From the above details of bought out items and its uses, it is clear that bought out items are neither used as parts nor accessories of the lattice mast as they are not required for manufacture of lattice mast. Therefore, trading activity of above items is separate activity which is independent from the manufacturing activity of the appellant. 6. It is also not even a case that appellant have provided the standard set of bought out items along with lattice mast but only in few cases it is supplied along with lattice mast. There are also cases where appellant are supplying only bought out items as a trading activity and not with lattice mast. This shows that the bought out items are optional for the customers to buy from the appellant manufacturing lattice mast. We find that the manufacturing of lattice mast is an independent manufacturing activity for which except the material used ....
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....lts and Other Tower Parts/accessories directly supplied to buyer's site from open market is to be included in the assessable value/transaction value or otherwise. The Respondent has recovered the cost of Nuts, Bolts and Other Tower Parts/accessories from the buyers on separate commercial invoices. As per the appellant they have supplied the towers in CKD condition to the buyers with whom they had written contracts. 53. I find that there is no dispute regarding the fact that the said items are duty paid. The credit of the same has neither been taken by the appellant nor disputed by the Department. In the appeal filed by the Department reliance is placed on the definition of transaction value it has been averred that the respondent is liable to pay duty on the entire contract price which includes cost of nuts, bolts, washers, shackles, hangers, since those are integral parts of transmission line towers and without these transmission line tower cannot be erected and made operational. The definition of transaction value i.e. the price actually paid or payable has to be read in the context of the words i.e. "for the goods when sold and it includes". The price paid or payable should ha....
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....since it was a case of includibility of the cost of the items which were fitted to the body of the trailer at the time of its clearance from the factory. The judgment of the Hon'ble Supreme Court in the case of Texmaco Ltd., was rendered in the' context of valuation of wagon-bodies mounted on "wheel sets". Here again the case is totally different than those involved in respondent's case. The ratio of the decision of Commissioner of Central Excise, Pune-I v. Thermax Bobcock & Wilcox Ltd., 2005 (182) E.L.T. 336 (Tri.-Mumbai) in which it was held that the value of bought out items received at site and used in erection of boilers, includible in assessable value of boilers, because such bought out items are necessary to make boiler functional. The ratio of this case is not applicable for the fact that the transmission line towers have no functional attributes. Further the said case is pending before the Hon'ble Supreme Court as reported in 2007 (207) E.L.T. A186 (S.C.) 57. Further in the case of Kerala State Electronics Dev. Corporation Ltd. v. Commissioner of C. Ex., Cochin it is held that bought out items sent to the site where they were assembled along with the traffic controllers ....
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....types and made of different materials. At the buyers option, these are supplied by the parts should be included in the assessable value of the cistern. The appellants relied on the decision of the Hon'ble Supreme Court in its judgment in the case of Union of India v. Koron Business Systems Ltd. - 1997 (93) E.L.T. 663 which upheld the judgment of the Bombay High Court. In that case the Bombay High Court held that plates and black shields are required for working of the photocopier but that by no stretch of imagination lead to the conclusion that plates and black shields are part and parcel of the machine. It was held that the value of plates and black shields cannot be included in the value of the photocopiers. Ld. Advocate argued that no doubt that the above-mentioned fittings are required to make the cistern functional but on account of that they cannot be called as parts of these cistern. The Tribunal in the case of EID Parry India Ltd. v. CCE - 2000 (124) E.L.T. 815 has held that the value of the fittings which were removed from godown after testing under a separate invoice is not includable in the assessable value of the cistern. The Tribunal in the case of Super Electronics v.....
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....ing the course of argument. In this regard, the Hon'ble Supreme Court in the case of Commr. of Central Excise, Trichy v. Neycer India Ltd. : 2015 (320) E.L.T. 28 (S.C.), observed that the value of the bought out items cannot be included in the assessable value of own manufactured goods under Section 4 of the Central Excise Act, 1944. In the instant case, it is admitted position that the assessee supplied the bought out items to the buyers only to ask for. In such a situation, the assessee buys the aforesaid co2mponents/items from the market and supplied to the buyers on their option. When it is so, then we find no reason to sustain the impugned order and the same is hereby set aside." (d) Mumbai bench in the case of Kores (India) Limited (supra) considered the similar issue and taken the same view: "5. Having considered the rival submissions, we find that ruling of Thermax Bobcock & Wilcox Ltd. (supra) relied upon by the learned AR for the Revenue, is clearly distinguishable because boiler is not cleared in its assembled form as such but cleared in several consignments part by part and assembled, whereas in the facts of the present case, the drill rig is complete when removed o....