Accurate Transformers Ltd. Vs. Commissioner of Central Excise

Accurate Transformers Ltd. vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Nov 16, 2004

~3 min read

https://sooperkanoon.com/case/37088

For advocates & juniors · 7-day free trial

Brief this judgment before chambers

Stop skimming 50 pages - get an 18-section AI Brief on this case, ask scoped follow-ups, and find related precedents with Semantic Search. Full trial, no card required.

18-section brief - facts, issues, ratio, relief
Ask this case - answers cite the judgment
Semantic search - find precedents by meaning
Research drawer - sections, cites, related cases

Citation: sooperkanoon.com/37088
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: S Kang, Vice-, A T V.K.
Decided On: Nov 16, 2004
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Accurate Transformers Ltd.

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2005)(179)ELT577TriDel

Excerpt

.....of by them. they are debiting the duty on the modvatable inputs whenever these are used for the repair work. the revenue has demanded the central excise duty from them on the ground that the activity of repairing the transformers amounts to manufacture. the deputy commissioner, under the order-in-original no. 68/2001, dated 23-10-2001, confirmed the duty holding that the duty on the components, which have been used for repairing the old transformers, is payable relying upon the decision in the case of siddhartha tubes ltd. v. cce, 2000 (120) e.l.t. 679 (t).the commissioner (appeals) also, under the impugned order, has rejected their appeal holding that the duty of excise has to be discharged on the intrinsic value of the goods as held by the supreme court in the case of sidhartha tubes ltd. v cce, 2000 (115) e.l.t. 32. the learned advocate has submitted that the activity undertaken by them on repairing the transformers does not amount to manufacture and no duty is payable by them on the components in respect of which modvat credit has not been availed of by them. we agree with the learned advocate that the duty is not to be paid by the appellants on the bought out components used by them while repairing the transformers. the commissioner (appeals) himself has given a specific finding in the impugned order that repair of transformers does not amount to manufacture. once the activity of repair undertaken by the appellants does not amount to manufacture, the question of making the payment of duty on the repaired transformers does not arise and once duty is not payable on the repaired transformers, the question of intrinsic value does not arise. in the case of siddhartha tubes ltd. (supra), the appellants were manufacturing mild steel pipes and tubes which were galvanised by them and the issue involved is whether the cost of galvanisation is to be included in the assessable value. in view of these facts, the supreme court has held that the mere fact that the.....

Full Judgment

1. In this appeal, filed by M/s. Accurate Transformers Ltd., the issue involved is whether they have to discharge the duty liability on the bought out items used for the repair of transformers.

2. We heard Shri Rajesh Chhibar, learned Advocate for the appellants and Sh. S.C. Pushkarna, learned D.R. for the Revenue.

3. The appellants manufacture electric transformers which are mainly supplied by them to the Electricity Boards. The Electricity Boards send the transformers, whenever there is some defect or any repair or maintenance is required to the appellants. While carrying out such repair, the appellants use some components in respect of which they have taken the Modvat credit of the duty and some components in respect of which no Modvat credit of the duty has been availed of by them. They are debiting the duty on the modvatable inputs whenever these are used for the repair work. The Revenue has demanded the Central Excise duty from them on the ground that the activity of repairing the transformers amounts to manufacture. The Deputy Commissioner, under the Order-in-Original No. 68/2001, dated 23-10-2001, confirmed the duty holding that the duty on the components, which have been used for repairing the old transformers, is payable relying upon the decision in the case of Siddhartha Tubes Ltd. v. CCE, 2000 (120) E.L.T. 679 (T).

The Commissioner (Appeals) also, under the impugned order, has rejected their appeal holding that the duty of excise has to be discharged on the intrinsic value of the goods as held by the Supreme Court in the case of Sidhartha Tubes Ltd. v CCE, 2000 (115) E.L.T. 32. The learned Advocate has submitted that the activity undertaken by them on repairing the transformers does not amount to manufacture and no duty is payable by them on the components in respect of which Modvat credit has not been availed of by them. We agree with the learned Advocate that the duty is not to be paid by the appellants on the bought out components used by them while repairing the transformers. The Commissioner (Appeals) himself has given a specific finding in the impugned order that repair of transformers does not amount to manufacture. Once the activity of repair undertaken by the appellants does not amount to manufacture, the question of making the payment of duty on the repaired transformers does not arise and once duty is not payable on the repaired transformers, the question of intrinsic value does not arise. In the case of Siddhartha Tubes Ltd. (supra), the appellants were manufacturing mild steel pipes and tubes which were galvanised by them and the issue involved is whether the cost of galvanisation is to be included in the assessable value. In view of these facts, the Supreme Court has held that the mere fact that the process of galvanisation is carried on in another shed can make no difference and the assessable value is to be calculated of the galvanised black pipes made by the appellants and the element of the cost of galvanisation must form a part thereof. Accordingly, we set aside the impugned order and allow the appeal.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Accurate Transformers Ltd. vs Commissioner of Central Excise Same Subject Service Tax Same Judge S Kang, Vice-, A T V.K.