2016 (9) TMI 90 - AT - Central Excise

Valuation - demand - for the period January 1997 to September 1997 - fire detection & alarm system installed at various sites - purchased/procured various items/components like photo electronic smoke detectors, thermal detectors, addressable monitor modules fault isolator modules, fire alarm panel, repeater panels, electronic hooters etc - Held that - the issue is squarely covered by the judgements of this Tribunal in the case of Zicom Electronics Security Systems Ltd. 2006 (6) TMI 57 - CESTAT,MUMBAI and Datamatics Information Tech Ltd. 2005 (7) TMI 168 - CESTAT, MUMBAI . In these two cases, the Tribunal was considering whether procurement of components of burglar, fire alarm systems and CCTV systems and installing the same at the site of the customer value is to includible or not in the value of manufactured goods and it was held in favour of the assessee. Nothing was brought to our notice that these judgements are upturned by any higher judicial forum. Similarly procured products or components are used in the current appeal and installed at the site of the customer, the ratio will apply and we hold on merits the appeal succeeds, as in essence the demand of duty is on the presumption that fire alarm system is manufactured for value taken is of bought-out items. Invokation of extended period of limitation - Held that - we find that the earlier orders of the Commissioners of Central Excise, Pune I and III, in an identical issue and in respect of very same assessee were not contested is the claim. Nothing was brought to our notice that these orders are contested in higher judicial fora. Therefore, since the demand for the earlier period (by invoking extended period) was dropped by two Commissioners of Central Excise, as adjudicating authority, the current show-cause notice which is invoking the extended period for the demand of duty is unsustainable on limitation also. - Decided in favour of appellant

Summary

Issues involved:
Demand of Central Excise duty on the appellant for the period January 1997 to September 1997 in relation to the installation of a "fire detection & alarm system."

Analysis:

1. Demand of Central Excise Duty:
The issue in this case revolved around the demand of Central Excise duty on the appellant for the installation of a fire detection and alarm system. The Revenue contended that the goods were manufactured at the customer's site by integrating various components procured by the appellant. The show-cause notice invoked the extended period for the demand of duty. The appellant contested the notice on both merits and limitation. The adjudicating authority initially dropped the proceedings, but the first appellate authority allowed the Revenue's appeal. However, the Tribunal noted that similar issues had been decided in favor of the assessee in previous cases, such as Zicom Electronics Security Systems Ltd. v. CCE and Datamatics Information Tech Ltd. v. CCE. The Tribunal held that since the components were procured and installed at the customer's site, the demand of duty was based on the presumption that the fire alarm system was manufactured, which was not the case. Therefore, the appeal succeeded on merits.

2. Limitation Issue:
Regarding the limitation aspect, the appellant argued that previous show-cause notices on the same issue had been dropped by the Commissioners of Central Excise, Pune I and Pune III, and were not challenged further. The Tribunal found that since the demand for the earlier period was dropped by the adjudicating authorities, invoking the extended period in the current show-cause notice was unsustainable on limitation grounds. The Tribunal ruled in favor of the appellant on the limitation issue as well. As a result, the impugned order was set aside, and the appeal was allowed with consequential relief, if any.

In conclusion, the Tribunal's judgment favored the appellant on both the demand of Central Excise duty and the limitation issue. The decision was based on the interpretation of previous judgments, the nature of the installation process, and the unsustainable nature of the extended period invocation for the demand of duty.