Customs, Excise and Gold Tribunal - Bangalore
Supercold Refrigeration Systems Pvt. ... vs Cce on 17 November, 2004
Equivalent citations: 2005(119)ECR58(TRI.-BANGALORE), 2005(191)ELT379(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. This appeal arises from OIA No. 6/2003-CE dated 28.2.2003 by which the Commissioner (Appeals) has rejected the appellant's appeal and has held that the value of Air Handlers is required to be added in the assessable value of the Split Air Conditioners. He rejected the plea that the appellants had purchased the air handlers from Delhi in open market under proper invoices in small quantities and stocked in their trading premises. The appellants have again reiterated their submissions and have submitted that the value of the Air Handlers purchased by them from Delhi in open market under proper invoices and sold through their trading premises cannot be added to the value of the Split Air conditioners. They had pointed out to the Sales Tax Registration obtained by them and produced the sale invoices to show that the Karnataka Sales Tax (KST) has been paid on the supplies. The learned Counsel took us to the entire record and pointed out that the items brought from outside and stocked for trading purposes in their premises, which is 300 m. away from the factory, its value cannot be added in the Split Air Conditioners manufactured by them and cleared on payment of duty. The Counsel relied on the judgment rendered by the Tribunal in the case of Siemens Ltd. v. CCE, Aurangabad 2002 (53) RLT 1096 (CEGAT-Mum.) : 2002 (105) ECR 251 (T) wherein the cost of batteries which were purchased separately and supplied to the buyers was held to be not addable to the value of the Uninterrupted Power Supply systems cleared from the factory. He also relied on the judgment rendered in the case of Frick India Ltd. and Anr. v. CCE, Delhi 2002 (48) RLT 251 (CEGAT) wherein also it has been held that bought out parts which were supplied separately not being brought into the factory, its value cannot be added in the value of Flywheel, Safety valve and Filter manufactured by the appellants and supplied with compressor. Further reliance was placed on the judgment rendered in the case of Electronics Corporation of India Ltd. v. CCE, Hyderabad-III wherein also it was held that the value of bought out accessories, however essential, supplied along with a machine cannot be subjected to duty. Further reliance was placed on the ruling rendered in the case of CCE, Coimbatore v. Jeetex Engineering Ltd. wherein also it was held that the value of bought out items installed at customer's premises cannot be added in the value of excisable goods cleared from the manufacturer's factory.
2. The learned JDR reiterated the Commissioner's findings. It is his submissions that the sales invoices of the Air Handling Machine purchased by the assessee cannot be considered to be authentic and pleaded that the same should not be accepted as per the findings given by the Commissioner. He submitted that the Air Handling equipment is required to be installed along with the Air Conditioners and are required to be considered as necessary and essential for Air Conditioners and, therefore, its value is required to be added in the value of the Split Air Conditioners.
3. On a careful consideration and examination of both the impugned orders, we are satisfied that the appellants had purchased the Air Handling Equipment independently from the open market in Delhi. The appellants have raised invoices and supplied the same by paying the sales tax at 12.5%. It is not the case of the Revenue that these documents are forged ones and the appellants have not paid the KST. When the appellants are registered with Karnataka Sales Tax Authorities and have paid sales tax on the purchased items viz. Air Handling Equipments, then it cannot be said to have been manufactured within the premises of the appellants. It is not the case of the department that the appellants have manufactured these items and they had all the facilities for manufacturing the same. There is no independent evidence of the appellant having manufactured it in their premises. Therefore, the rulings relied by the appellants clearly apply to the facts of the case. The appellants had not manufactured the Air Handling Machines but had purchased the same from the open market from Delhi and supplied it to their customers by paying the Sales Tax. The ratio of the judgments relied clearly apply to the facts of the case. Respectfully following the same, the impugned order is set aside and the appeal is allowed with consequential relief.
(Pronounced in open Court on 17.11.2004).