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Excise Appeal Nos. 41384 of 2016, 41283 of 2017, 40624 of 2019

6. Hence, as per Section 2 (f) (iii) of the Central Excise Act, 1944, read with S.No. 100 of the table annexed to the Third Schedule, it appeared that the activity of packing / repacking / labelling of the 'Spare Parts', which are ultimately used in SPVs falling under TSH 87 05, by the Taxpayer, amounts to manufacture and consequently attracts levy of Central Excise Duty.

7. It therefore appeared to the department that appellant is liable to pay duty on the spare parts of Concrete Boom Pumps placed on truck - 8705.90.00, Transit Mixers - 8705.49.00 and line pump with truck - 8705.40.00 which are cleared after repacking and labelling from 27.2.2010 onwards.

11. However, it appeared to the department that the packing / repacking / labelling of parts and components of SPVs amounts to manufacture and appellant is liable to pay excise duty on spares / parts cleared from 27.02.2010 onwards, as per Section 4A of the Central Excise Act, 1944.

12. Again, as per Rule 3 of Legal Metrology Rules 2011, the provisions of the said chapter does not apply to packaged commodities meant for industrial consumers or institutional Excise Appeal Nos. 41384 of 2016, 41283 of 2017, 40624 of 2019 consumers. It was noted by the department that the SPVs mounted with concrete Mixers / Pumps are purchased by construction companies / firm like L&T, Gammon India, HCC, Soma etc. for direct use in their projects. The clearances having been made by appellant to industrial consumers, it is not required to declare the MRP on the packages of spares / parts of SPVs. In such cases CBEC in para 6.2 of chapter 3 of the Manual of supplementary Instructions has clarified that the valuation has to be done under section 4 of Central Excise Act, 1944.

17.1 The appellant has imported spares of these SPVs in bulk and then repacked them into unit containers. Such unit containers are then labelled. These activities amount to deemed manufacture as Excise Appeal Nos. 41384 of 2016, 41283 of 2017, 40624 of 2019 per 2 f (iii) of the definition of manufacture as per Central Excise Act, 1944.

17.2. The learned AR adverted to the discussions in para 21 and 22 of the impugned order and submitted that the parts and components of vehicles falling under Chapter 87 come under Sl.No.100 of the Third Schedule to Central Excise Act, 1944. Therefore, the activity of packing / repacking / labelling done by the appellant of such spares and parts of SPVs falling under Sl.No.100 of the Third Schedule amounts to manufacture and not trading as contended by the appellant. The appellant is liable to discharge excise duty on the spares cleared by them after repacking and labelling.

Further SI.No. 100 of the table annexed to the Third Schedule, which was inserted with effect from 27.02.2010, covers parts/components/ assemblies of vehicles falling under 87 (excluding vehicles TSHS 8712, 8713, 8715 and 8716).

Hence, As per Section 2 (f) (iii) of the Central Excise Act, 1944, read with SI.No. 100 of the table annexed to the Third Schedule, it appears that the activity of packing / repacking / labelling of the 'Spare Parts', which are ultimately used in SPVs falling under TSH 87 05, by the Taxpayer, amounts to manufacture and consequently attracts levy of Central Excise Duty."