2000 (3) TMI 121 - AT - Central Excise

Summary

Issues:
1. Inclusion of the cost of battery in the assessable value of the UPS System.
2. Allegation of relationship between two companies affecting the duty demand calculation.
3. Correct computation of duty demand for clearances of UPS System with battery.

Issue 1: Inclusion of the cost of battery in the assessable value of the UPS System
The dispute in this case revolved around whether the cost of the battery should be included in the assessable value of the UPS System. The Departmental Representative argued that the value of the battery is an integral part of the UPS System and should be included, citing a previous decision by the CEGAT. The respondent's counsel acknowledged this but contended that if the UPS System was sold without the battery and the battery was added later by a third party, the manufacturer should not be held liable. The Tribunal agreed that the value of batteries should only be added to the assessable value when the UPS was cleared along with the battery from the manufacturer.

Issue 2: Allegation of relationship between two companies affecting the duty demand calculation
The case also involved an allegation that two companies, M/s. Vistar Electronics Pvt. Ltd. and M/s. D.B. Electronics, were related, which could impact the duty demand calculation. However, upon reviewing the shareholding pattern and management structure, the Tribunal found that the allegation of a relationship between the two companies was not sustainable. The duty demand was directed to be determined based on the manufacture and clearance from M/s. D.B. Electronics, without considering the transactions involving M/s. Vistar Electronics Pvt. Ltd.

Issue 3: Correct computation of duty demand for clearances of UPS System with battery
Due to the lack of separate records for the duty demand related to clearances of the battery and UPS System from M/s. D.B. Electronics and the sale of UPS System with added battery from Vistar Electronics Pvt. Ltd., the case was remanded for the correct computation of duty demand. The Jurisdictional Commissioner was instructed to include the value of batteries in the UPS System's value for clearances from M/s. D.B. Electronics. The respondent was granted the opportunity to present their case regarding the correct amount of duty payable before the duty demand computation was finalized.

This judgment clarifies the assessment of the assessable value of UPS Systems, addresses the issue of related companies affecting duty calculations, and emphasizes the importance of accurate duty demand computation for clearances involving additional components like batteries.