Custom, Excise & Service Tax Tribunal
M/S. Greysham & Co vs C.C.E. Delhi - I on 14 February, 2014
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI COURT NO. I Date of hearing/Decision: 14.02.14 Appeal No. E/596/2005-EX[DB] M/s. Greysham & Co. Appellant Vs. C.C.E. Delhi - I Respondent
[Arising out of Order-In-Appeal No.165-CE/DLH/2004 dt. 16.12.2004, passed by Commissioner Central Excise(Appeals-I) New Delhi.] For approval and signature:
Honble Mr. Justice G.Raghuram, President Honble Mr. Rakesh Kumar, Member(Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Present:
None- for the appellant Sh. Yashpal Sharma, DR - for the Respondent CORAM :
Honble Mr. Justice G.Raghuram, President Hon'ble Mr. Rakesh Kumar, Member (Technical) FINAL ORDER NO. FO/50678/2014 Per Rakesh Kumar:-
1.1 The Appellant are manufacture of Air Brake Equipments for Railways. In terms of their contracts with Railways, they manufacture certain equipments for Air Brake systems and also purchase pipes and pipe fitting from outside, supply the goods manufactured by them as well as pipes and pipe fitting purchased from outside and carry out installation of Air Brake systems in the coaches having built at the Integrated Coach Factory, Chennai of Railways. The Central excise invoices issued by them mention only the price charged for Air Brake equipments on which Central Excise duty is paid. They charge for the installation charges and for the pipes and pipe fittings separately. The Excise duty was being paid by the appellant only on the goods manufactured by them which were being supplied under separate invoices. The Department was of the view that the cost of the pipes and pipe fittings and also the installment charges are includible in the assessable value of the Air Brake equipment manufactured and cleared by them to Railways and on this basis, after issue of Show Cause Notice the Additional Commissioner vide Order-in-Original dt.26.12.03 confirmed the duty demand of Rs.12,37,087/- for the period 2001-2002 along with interest thereon under section 11AB and besides this imposed penalty of equal amount on the Appellant under section 11AC. On appeal being filed to Commissioner (Appeals) against this order, Additional Commissioners order was upheld vide Order-in-Appeal dt. 16.12.04. Against his order of the Commissioner (Appeals), this appeal has been filed.
2. None appeared for the Appellant. Heard Sh. Yashpal Sharma, the learned DR who defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that since complete Air Brake Systems were coming into existence only at the Integrated Coach Factory Chennai and in terms of the appellants contract with ICF, Chennai, they were not only supplying the Air Brake equipment but were also installing the same in the coaches, the cost of pipes and pipe fittings and installation charges would be includible in the assessable value of the Air Brake equipments manufactured and cleared by them. He also emphasized that the Air Brake Equipments is not functional without pipes and pipes fitting and becomes functional only after its installation in the Coaches. He, therefore, pleaded that there is no infirmity in the impugned order.
3. We have considered the submissions of the learned DR and have perused the records. The undisputed facts are that the appellant manufactured certain Air Brake Equipments and cleared the same from their factory to Integrated Coach Factory, Chennai of the Railways. Pipes and pipe fittings of the Air Brake systems were bought from the outside and supplied separately to the ICF, Chennai and thereafter the goods manufactured and cleared by the appellant along with bought out pipes and pipe fittings were installed in the Railways Coaches as Air Brake Systems. In our view since what had been manufactured and cleared by the appellant was Air Brake Equipment and this is not a case of where bought out items had been brought to the factory for use in the manufacture of the final products, the value of bought out items would not be includible in the assessable value. Similarly the installation of the Air Brake equipment has not nothing to do with the manufacture of the Equipments and hence the charges for the same are not includible in the assessable value of the Air Brake equipment. The impugned order is, therefore, not correct. The same is set aside. The appeal is allowed.
(Justice G.Raghuram) President (Rakesh Kumar) Member (Technical) S.Kaur 1