Customs, Excise and Gold Tribunal - Bangalore
Cce vs Ravi Krishna Castings Ltd. on 2 June, 2004
Equivalent citations: 2004(115)ECR788(TRI.-BANGALORE), 2004(176)ELT556(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. This is a Revenue's appeal against the Order-in-Appeal No. 31/99 (H-II)(D)CE dated 23.6.1999 passed in the Department's appeal before the Commissioner. The question to be decided in the appeal is as to whether the value of bought out items such as CID joints is to be added to supplies of rubber rings, nuts and bolts. The Commissioner examined the order of the Assistant Commissioner and found on facts that bought out items are not integral parts of CID joints. He noted that cast iron detachable joints are used joining AC pipes in water supply schemes. The contention that the manufacturing of CID joints is complete even though insertion of the rubber rings, nuts and bolts for the joints of provisions for such insertion was accepted. It was also noted that the joints were not removed from the bought out items attached to them. The Commissioner noted that the bought out items were purchased from the market and supplied in terms of contractual obligations by the respondents. The Commissioner applied the ratio of the Tribunal judgment rendered in the case of CCE Meerut v. Friction Materials wherein it was held that the bought out articles supplied along with own manufactured goods, this value is not to be included in the assessable value of manufactured goods. Further reference was made to the Tribunal judgments rendered in the case of Jayashree Insulators Ltd. v. CCE, Calcutta wherein it was held that bought out items invoiced and supplied separately on specific demand of customers does not form part of the Insulators and it's value is not to be added. The Commissioner clearly noted that the items were supplied on specific demands of customers and that they are not required to be fitted to the joints before removal from the factory. Therefore he upheld Order-in-Original which was decided in the assessees favour.
2. Revenue contends in this appeal that the rubber rings, bolts and nuts are required to be supplied along with CID joints. In these parts supplied are essential parts of CID joints as they prevent leakage of fluids passing through a series of pipelines connected to each other by these joints. The joints become an incomplete assembly and loses its utility in absence of the above three parts. Therefore their value is required to be added in the assessable value of the goods removed by the assessee. Learned SDR relies on the judgment of the Tribunal in the case of Nichrome Metal Works v. CCE, Pune wherein it was held that bought out items supplied along with manufactured goods is required to be added when they form essential part of the supplied goods and when they enrich its value. He submits that all the parts are incomplete assembly and therefore they are essential parts and hence the value of bought out items is required to be added in the assessable value. The respondents have requested the matter to be decided on merits and seek for upholding the favourable findings given by the authorities.
3. On a careful consideration of the submissions we notice from the case law relied by both the sides that he value of the bought out item is required to be added only when they are essential parts of the goods and when they enrich its value. Both the authorities have examined the question of fact and have found that the bought out items are not essential parts and they were supplied in terms of the request made by the Customer to fulfill the contractual obligation. This question of fact having been examined by both the authorities and found that the bought out items are not essential parts of the goods hence then we are not in a position to come to a different conclusion to hold that they are essential parts. The citation relied by learned DR is distinguishable. We do not find any infirmity in the impugned order and hence the appeal filed by the Revenue is rejected.
(Pronounced and dictated in open Court).