Eicher Farm Machinery Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:

.....dated 9-1-1991 passed by the additional collector of central excise, chandigarh is under challenge in this appeal.2. appellant, engaged in the manufacture of agricultural tractors, was filing price lists from time to time and paying duty on the basis of the approved prices. the dispute in this appeal relates to the period from 1-9-1982 to 16-4-1985 in respect of mudguard seat, roof canopy, draw bar long, coupling mouth, coupling bolt and rear towing hook, all bought out items, supplied to purchasers of some of the tractors during the period. by show cause notice dated 22-11-1985, demand of duty on the clearance of the aforesaid items was proposed. appellant resisted the notice on merits as well as on the ground of limitation. the additional collector dropped the demand in respect of draw bar and rear towing hook on the ground of limitation, but confirmed the demand in respect of the other four items. this order is under challenge.3. the items in dispute are mudguard seat, roof canopy, coupling board and coupling mouth. in the appellant's own case reported in 1997 (94) e.l.t. 331 (tribunal), the tribunal held that mudguard seat is not a component part of a tractor. similar is.....

Judgment:

1. Order-in-Original No. 58-D/90, dated 9-1-1991 passed by the Additional Collector of Central Excise, Chandigarh is under challenge in this appeal.

2. Appellant, engaged in the manufacture of agricultural tractors, was filing price lists from time to time and paying duty on the basis of the approved prices. The dispute in this appeal relates to the period from 1-9-1982 to 16-4-1985 in respect of Mudguard Seat, Roof Canopy, Draw Bar Long, Coupling Mouth, Coupling Bolt and rear Towing Hook, all bought out items, supplied to purchasers of some of the tractors during the period. By show cause notice dated 22-11-1985, demand of duty on the clearance of the aforesaid items was proposed. Appellant resisted the notice on merits as well as on the ground of limitation. The Additional Collector dropped the demand in respect of Draw Bar and rear Towing Hook on the ground of limitation, but confirmed the demand in respect of the other four items. This order is under challenge.

3. The items in dispute are Mudguard Seat, Roof Canopy, Coupling Board and Coupling Mouth. In the appellant's own case reported in 1997 (94) E.L.T. 331 (Tribunal), the Tribunal held that Mudguard Seat is not a component part of a tractor. Similar is the decision of the Tribunal in the appellant's own case reported in 1992 (62] E.L.T. 772 (Tribunal) in respect of Roof Canopy. Coupling Bolt and Coupling Mouth are necessary to connect trailer with the tractor. Trailer is not a component part of a tractor. Some buyers of tractor may require trailer also and may buy these two items to connect the trailer with the tractor. Annexure 'A' to the show cause notice indicates that the demand is in respect of 6,055 units of Mudguard Seats, 3,835 units of Roof Canopy, 4,311 units of Coupling Mouth and 5,589 units of Coupling Bolt. It is stated that during the period in question around 10,000 tractors would have been sold. All these circumstances are sufficient to show that the items in question are only optional accessories sold at the request of specific buyers. Hence, their value cannot be included in the assessable value of tractors. In view of this finding, we find it unnecessary to consider the question of limitation, though we may notice, in passing that in respect of four items four show cause notices had been issued earlier and proceedings dropped.

4. For the reasons aforesaid, we set aside the impugned order and allow the appeal.