2018 (5) TMI 1202 - AT - Central Excise

Valuation - erection of towers - The department opined that the value of the bolts and nuts mild steel washers etc. have to be included in the assessable value for the purpose of determining duty - Held that - the identical issue has come up before the Tribunal in the case of Himalaya Asbestos Cement Products P. Ltd. Vs. CCE Jaipur 2018 (3) TMI 97 - CESTAT NEW DELHI where it was held that Since this material is not manufactured by the appellant but only supplied alongwith pipes we are of the view that there is no mandate for including the value of such joining material. The value of bolts and nuts is not required to be included for the payment of excise duty especially when such bought out items were used at the site for creating immovable property. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Inclusion of value of bolts and nuts in assessable value for excise duty determination.

Analysis:
The case involved an appeal against an Order-in-Original dated 8.11.2015 & 24.11.2015 concerning the period of dispute from 2009 to 2014. The appellant, engaged in manufacturing towers and structures for power transmission, supplied fabricated galvanized parts with holes for bolts and nuts for tower erection. The department contended that the value of bought-out items like bolts, nuts, washers should be included in the assessable value for duty calculation. The Tribunal referred to a previous case where it was held that when bought-out items are used on-site for creating immovable property, their value need not be included for excise duty payment. Consequently, the Tribunal set aside the impugned order and allowed the appeals, stating that the value of bolts and nuts need not be included for excise duty payment.

The Tribunal noted that the dispute revolved around the value of goods subject to excise duty payment. Citing a previous case, it was emphasized that when materials not manufactured by the appellant but supplied along with the main product are used for creating immovable property, their value should not be included for excise duty calculation. This principle was applied in the current case, leading to the decision that the value of bolts and nuts need not be considered for excise duty payment, especially when these items were utilized on-site for erecting transmission line towers. As a result, the impugned order was set aside, and the appeals were allowed, with miscellaneous applications being disposed of accordingly.

In conclusion, the judgment clarified that in situations where bought-out items are utilized on-site for constructing immovable property, their value should not be included for excise duty payment. This principle was applied to the case at hand, where the appellant supplied fabricated parts along with bolts and nuts for tower erection. As a result, the Tribunal set aside the original order and allowed the appeals, indicating that the value of bolts and nuts need not be factored into the excise duty calculation, given their use in creating immovable property.