2004 (11) TMI 246 - AT - Central Excise

Summary

Issues involved: Interpretation of assessable value in relation to the purchase of Air Handling Machines and its inclusion in the value of Split Air Conditioners.

Summary:
1. The appeal challenged the rejection of the appellant's plea to exclude the value of Air Handlers purchased from Delhi and stocked in their trading premises from the assessable value of Split Air Conditioners. The appellant argued that the Air Handlers were bought from the open market with proper invoices and sales tax paid, thus not subject to inclusion in the value of the Air Conditioners. Reference was made to previous judgments supporting the separation of purchased components from the main product's value.

2. The JDR supported the Commissioner's stance that the Air Handling Machines were essential for the Air Conditioners and should be included in their value. He questioned the authenticity of the sales invoices provided by the appellant for the purchased equipment.

3. Upon review, it was established that the appellants legitimately purchased the Air Handling Equipment from Delhi's open market, paid sales tax, and did not manufacture the items themselves. As the appellants were registered with the Karnataka Sales Tax Authorities and had paid taxes on the purchased items, the purchased Air Handling Machines were not considered to be manufactured within their premises. The Tribunal found no evidence of manufacturing by the appellants and concluded that the purchased Air Handling Machines should not be included in the value of the Split Air Conditioners. Rulings supporting this interpretation were cited, leading to the setting aside of the impugned order and allowing the appeal with consequential relief.