TaxTMI 
TaxTMI 
2005 (1) TMI 145
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....pondents' factory. Some parts are manufactured at the respondents' vendors premises 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 respondent clears these parts classifying them under Chapter Sub-heading No. 8402.10 of CETA applicable to boilers on payment of duty. The following parts of the boiler are cleared by the respondent 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)....
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....characteristics of a complete machine/goods even when they are removed in unassembled form. The Commissioner after having decided that the goods as removed by the respondents are classifiable under sub-heading 8402.10 meant for boilers also held that the value of brought out items is not to be added to the assessable value. He relied on the experts opinion (Professor of Mechanical Engineering Department Government Engineering College Pune) who opined that what has been cleared by the respondent from the factory are complete boilers in SKD condition. The expert also opined that the goods in question have all the essential characteristics and utility of steam generator (boilers) although delivered in lots because of constraint involved in tra....
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....parts but not the whole are cleared from the factory in view of the fact that the respondent has a contract to erect and commission a boiler and has been disclosing this fact to the Department. 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. We therefore uphold the contention of the Commissioner and reject the Revenues appeals in so far as this aspect is concerned. (b) Bought out items-inclusion of value thereof : Revenue has ch....
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.... 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 valves, process valves, level guager etc. These parts are necessary to make a boiler functional. Their value therefore has to be included in the assessable value. It is immaterial that no Modvat credit has been taken by the respondents. We are not sure that any Modvat was available to the respondents on these bought out items. We ....