TaxTMI 
TaxTMI 
2026 (4) TMI 754
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....applicable central excise duty at the time of the clearance of the goods; during the conduct of an audit, it was observed by the department that the appellant procures orders for installation of modular kitchens and certain products are not manufactured by them; the same are procured from outside and cleared along with the manufactured items by paying duty on the value which includes the bought-out items. In some cases, the appellants supply the bought-out items directly from the head office to the site where they are installed. Department was of the opinion that the value of such items is also includable in the assessable value of the goods cleared by them. Accordingly, a show cause notice dated 19.01.2016 was issued, demanding central exc....
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....red goods and not on bought-out items; the fact that the appellants are paying duty when the bought-out items are cleared from the factory along with the manufactured items, is not controverted; the activity of the appellant involves installation and erection of modular kitchens at customer's premises and when they are installed at the customer's premises, they become immovable and excise duty is not leviable; in the impugned case, the dispute is about the items traded by head office and supply directly to the site of the customer; the items include kitchen hoods, hobs, chimneys, ovens, microwaves and fittings, which are not integral part of the modular kitchen and therefore, it cannot be said that the value is includable. Department's reli....
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....k was beyond jurisdiction. He also submits that the Show Cause notice did not propose any classification for the modular kitchens installed at the customer's premises and as such taxability is not decided and hence, duty cannot be demanded. He also submits that no penalty can be imposed as the entire case is about appreciation of the legal position. He relies on the following cases: * J.K. Pharmachem Ltd. - 2008 (226) ELT 749 (Tri.0 * ONGC ltd. - 2002 (149) ELT 1182 (Tri.) * Vicco Laboratories - 2005 (179) ELT 17 (SC) * Uniflex Cables Ltd. - 2011 (271) ELT 161 (SC) * Vijay Television (P) Ltd. - C.M.A. No.3292 of 2009 (Madras HC) 5. Ms. Amita Gupta, learned Authorized Representative for the Dep....
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.... invocation of extended period of limitation. 7. We find that Revenue seeks to include the value of the items like kitchen hoods, chimney, ovens, microwaves and fittings, bought out by the head office of the appellants and are installed along with the kitchen systems alleged to have been manufactured by the appellants. It is not the case of the Revenue that such bought out items are manufactured by the appellants. We also find that Revenue has not made out any case that the bought-out items are essential parts of the systems manufactured by the appellants. The bought-out items may have been procured by the appellants on the request of the customers. However, by any stretch of imagination, these items cannot be said to be essential parts ....
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....arts in question are essential parts of the compressor which is manufactured and cleared by M/s Frick India Ltd. It is not the issue in the case before us. In the instant case, the bought-out items are like kitchen hoods, chimney, ovens, microwaves and fittings which cannot be said to be essential parts for the manufacture of modular kitchens. Therefore, to that extent, the reliance on the case of M/s Frick India Ltd. is misplaced. We also find that Hon'ble Supreme Court in the case of MIL (India) Ltd. (supra) clarified that inclusion of bought-out items depends on the facts of each case and kept open the issue of exigibility open. Therefore, we find that the cases relied upon by the Revenue are of no avail. 9. We find that Tribunal in t....