Anamed Instruments Pvt. Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:

.....table covers precision balances of sensitivity of 5 mg. or better falling under chapter 84 or 90. the memo, of appeal states that appellant was manufacturing and clearing balances of sensitivity ranging from 0.01 gm to 0.1 gm. the sensitivity of the appellants goods was much inferior to the sensitivity required under the notification.therefore, the benefit of notification was not available to the appellant. the more important question is whether the cost of wind draft shield, a bought out item, supplied to the customers should be included in the assessable value of electronic balances. according to the appellant it is only an optional accessory. the contention was rejected by the additional collector. basic purpose of wind draft shield is to protect the balance from the influence of draft or wind and this is necessary to maintain sensitivity of the balance. looking at the issue from this point of view it appears that wind draft shield is a necessary component of electronic precision balances. the appellant has not shown that wind draft shield was being supplied only to a few customers. in these circumstances, the finding of the additional collector has to stand. stamping.....

Judgment:

1. Appellant is absent in spite of notice but has sent a request for decision of the appeal on merits. We have heard Shri M. Ali, JDR and perused the papers.

2. Appellant is engaged in the manufacture of electronic balances of high sensitivity. The dispute in the appeal relates to the period June, 1985 to March, 1987. Appellant was filing price lists and on approval of the same clearing goods on payment of appropriate duty. Show cause notice was issued stating that the appellant failed to include the value of wind draft shield supplied to the customers in the value of electronic balances and also collected separately stamping charges and this was done without declaring the same to the Department and, therefore, appellant was guilty of suppression of material information with intent to evade duty. The notice proposed demand of differential duty for the entire period. Though the appellant resisted the notice, the Additional Collector confirmed the demand and imposed penalty of Rs. 500/-. This order is now challenged.

3. Notification 71/86, dated 10-2-1986 exempted goods specified in the Table to the notification from payment of Central Excise duty. Item 7 of the Table covers precision balances of sensitivity of 5 mg. or better falling under Chapter 84 or 90. The Memo, of Appeal states that appellant was manufacturing and clearing balances of sensitivity ranging from 0.01 gm to 0.1 gm. The sensitivity of the appellants goods was much inferior to the sensitivity required under the notification.

Therefore, the benefit of notification was not available to the appellant. The more important question is whether the cost of wind draft shield, a bought out item, supplied to the customers should be included in the assessable value of electronic balances. According to the appellant it is only an optional accessory. The contention was rejected by the Additional Collector. Basic purpose of wind draft shield is to protect the balance from the influence of draft or wind and this is necessary to maintain sensitivity of the balance. Looking at the issue from this point of view it appears that wind draft shield is a necessary component of electronic precision balances. The appellant has not shown that wind draft shield was being supplied only to a few customers. In these circumstances, the finding of the Additional Collector has to stand. Stamping referred to is one required under the Weights & Measures Act and the Rules thereunder. We fail to see why the cost thereof should not be included in the assessable value as without the same the product cannot be marketed.