Best and Crompton Engineering Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:
1. today the case is posted only for consideration of stay application.however, upon hearing both the parties for some time, we feel that the appeal itself could be taken up and disposed of after allowing the stay application.2. the appellants are an engineering company who manufacture goods as well as take up contracts for setting up projects. in the instant case, they manufactured bus ducts in their factory and cleared them on payment of duty. since they had contract for installing the bus ducts along with other machinery at site, the manufactured bus ducts were transported to the sites and erected. while erecting, the appellants used many items purchased from the market like control panels, conductors, current transformers, surge protection items and other items also for erection of the machinery. the dispute raised in the present proceeding is whether the value of such purchased items, used in the erection of the plant, are liable to be included while assessing the bus ducts manufactured in the appellants' factory to duty.3. the ld. counsel for the appellants submitted that the demand in the present case is not tenable at all as the appellants were not the manufacturer of the items purchased from the market. he also submitted that the cost in connection with the erection of the machinery at site are not in any way relatable to the cost of the manufacture of the bus ducts in the factory. he also submitted that if the department was of the view that the plant erected at site was liable to duty, demands were required to be made by the concerned jurisdictional authorities.the ld. counsel in this context took us to the decisions of this tribunal in the case of om metals & mineral (p) ltd. v. cce, ahmedabad [2000 (46) rlt 744]; cce coimbatore v. jeetex engg. ltd. [2000 (40) rlt 83-trib.] and coimbatore aerobase & control systems (p) ltd. v. cce, coimbatore 4. as against the above submission for the appellants, the ld. dr pointed out that the bought out items also have direct relation to the assembly of the bus ducts. therefore, their value has been correctly included by the lower authorities. he also pointed out that in the earlier remand proceedings, the lower authorities had directed to decide the case afresh after considering whether the supreme court decision in the m/s mittal engineering case was attracted in the present case and also the valuation of the goods.om metals & minerals (p) ltd. v. cce ahmedabad and cce coimbatore v. jeetex engg. ltd. that the value of bought out items used for the erection of plant and machinery cannot form part of the goods manufactured in the factory. in the present case, there is no dispute that various items like control panels, surge protection device, current transformers, etc. had been purchased from the market, taken directly to the installation site and utilised for installation of a plant. in view of our earlier decisions cited supra, there was no warrant to include the value of these bought out items while fixing the assessable value for the bus ducts manufactured in the factory of the appellants. therefore, we are of the considered opinion that the duty demand in the present case is not justified. the appeal is accordingly allowed with consequential relief, if any, to the appellants.

Judgment:
1. Today the case is posted only for consideration of stay application.

However, upon hearing both the parties for some time, we feel that the appeal itself could be taken up and disposed of after allowing the stay application.

2. The appellants are an engineering company who manufacture goods as well as take up contracts for setting up projects. In the instant case, they manufactured Bus Ducts in their factory and cleared them on payment of duty. Since they had contract for installing the Bus Ducts along with other machinery at site, the manufactured Bus Ducts were transported to the sites and erected. While erecting, the appellants used many items purchased from the market like control panels, conductors, current transformers, surge protection items and other items also for erection of the machinery. The dispute raised in the present proceeding is whether the value of such purchased items, used in the erection of the plant, are liable to be included while assessing the Bus Ducts manufactured in the appellants' factory to duty.

3. The Ld. Counsel for the appellants submitted that the demand in the present case is not tenable at all as the appellants were not the manufacturer of the items purchased from the market. He also submitted that the cost in connection with the erection of the machinery at site are not in any way relatable to the cost of the manufacture of the Bus Ducts in the factory. he also submitted that if the department was of the view that the Plant erected at site was liable to duty, demands were required to be made by the concerned jurisdictional authorities.

The Ld. Counsel in this context took us to the decisions of this Tribunal in the case of OM METALS & MINERAL (P) LTD. v. CCE, AHMEDABAD [2000 (46) RLT 744]; CCE COIMBATORE v. JEETEX ENGG. LTD. [2000 (40) RLT 83-TRIB.] and COIMBATORE AEROBASE & CONTROL SYSTEMS (P) LTD. v. CCE, COIMBATORE 4. As against the above submission for the appellants, the Ld. DR pointed out that the bought out items also have direct relation to the assembly of the Bus Ducts. Therefore, their value has been correctly included by the lower authorities. He also pointed out that in the earlier remand proceedings, the lower authorities had directed to decide the case afresh after considering whether the Supreme Court decision in the M/s Mittal Engineering case was attracted in the present case and also the valuation of the goods.Om Metals & Minerals (P) Ltd. v. CCE Ahmedabad and CCE Coimbatore v. Jeetex Engg. Ltd. that the value of bought out items used for the erection of Plant and machinery cannot form part of the goods manufactured in the factory. In the present case, there is no dispute that various items like control panels, surge protection device, current transformers, etc. had been purchased from the market, taken directly to the installation site and utilised for installation of a plant. In view of our earlier decisions cited supra, there was no warrant to include the value of these bought out items while fixing the assessable value for the Bus Ducts manufactured in the factory of the appellants. Therefore, we are of the considered opinion that the duty demand in the present case is not justified. The appeal is accordingly allowed with consequential relief, if any, to the appellants.