Customs, Excise and Gold Tribunal - Mumbai
Inox Air Products Ltd. vs Commissioner Of Central Excise, ... on 27 February, 2002
Equivalent citations: 2002ECR539(TRI.-MUMBAI), 2002(144)ELT359(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Appeals taken up for disposal, after waiving deposits.
2. The question for consideration in these appeal is the includibility in the assessable value of liquid oxygen and liquid nitrogen that the appellant manufactured and sold of the charges for hire of the specially fabricated storage tank that it made available to some of the buyers. In the order impugned in these appeals, the Commissioner has held that the charges are includible and has also imposed a penalty on the appellant.
3. This Tribunal, dealing with an appeal by the same appellant, which was earlier known as Industrial Oxygen Company Ltd, had, relying upon the judgment of the Supreme Court in CCE v. Indian Oxygen Ltd. - 1988 (36) E.L.T. 730, held that these charges were not includible in the assessable value of the excisable goods manufactured by the appellant, on its view that this activity was distinguishable from the manufacture that the appellant undertook of the gases. This decision was cited before the Commissioner. He has however refused to follow it, on his finding that the facts and circumstances of the Supreme Court's judgment in Indian Oxygen Ltd's case would be distinguishable from the facts and circumstances of the case before him.
4. We are unable to support the Commissioner's order for two reasons. The first is that the Commissioner has in effect found the Tribunal's order wrongly applied the judgment of the Supreme Court to the facts before it and thus come to an erroneous conclusion. Now, the Commissioner is certainly entitled to hold that the Tribunal's order was wrong; if he felt so, he should have proceeded on that basis and filed an appeal before the Supreme Court or any other competent Court and asked for stay of operation of the order. We are told by the counsel for the appellant that to the best of his knowledge none of these has been done and no appeal has so far (more than three years after passing of the order). That being the case, the Commissioner was bound to follow the order of the Tribunal, however much he disagreed with what it says. His failure to follow it is enough to strike down his order.
5. Apart from this, we do not find that he has any case on merits for not applying the Supreme Court's judgment. The question in the appeal before the Supreme Court was whether the rental charges for the cylinders in which Indian Oxygen Ltd. supplied the gas it manufactured to its buyers should form part of the assessable value of the gases. The Court said that supply of cylinders was not a manufacturing activity and was ancillary to the supply of the gases, but it was strictly not incidental thereto, because there are classes of persons who can take either of these gases without supply of cylinders by the manufacturer. In such cases, the question of charging rent would not arise. The same situation is before us. The appellant did not make available the storage facilities to every buyer. It had provided to the Commissioner, in reply to the notice, two lists one of buyers to whom it provided the storage tanks and the other to whom it did not provide them and have not charged rent. (The Commissioner has conveniently overlooked these two lists.) We, therefore, see no reason for consideration of the matter to differ from our earlier view.
6. Appeals are accordingly allowed and the impugned order set aside.