1998 (1) TMI 164 - AT - Central Excise

Summary

Issues:
1. Challenge to duty demand, penalty, and confiscation of plant and machinery.
2. Classification of compressors and drilling equipment including bought-out items.
3. Multiple show cause notices issued for duty demand on various items supplied along with compressors.
4. Adjudication by Assistant Collector and Commissioner (Appeals) on duty demand.
5. Jurisdiction issue regarding the period covered in the show cause notice.
6. Interpretation of control panels as component parts of compressors.
7. Applicability of Limitation provisions in the case.

Analysis:

1. The appeal challenged the Order confirming duty demand, imposing penalty, and confiscating plant and machinery. The Appellant, engaged in manufacturing compressors and drilling equipment, cleared goods with appropriate duty. Bought-out items like control panels and hoses were also supplied. Classification lists and show cause notices were issued for duty demands on these items.

2. The Appellant filed classification lists without mentioning bought-out items initially. The Superintendent issued show cause notices proposing duty demands on control panels and hoses supplied with compressors. The Assistant Collector confirmed duty demands based on these notices. The Commissioner (Appeals) set aside some orders regarding provisional assessments.

3. Various show cause notices were issued proposing duty demands for different periods on bought-out items supplied with compressors. The Commissioner adjudicated on these notices, leading to the challenge in the present appeal.

4. The main contention was the inclusion of control panels in the assessable value of compressors. The Commissioner relied on statements indicating control panels' necessity for operating motors used in compressors. The Appellant argued control panels were not component parts of compressors but essential for motor operation.

5. The issue of Limitation arose due to the time lapse between the first notice and subsequent actions by the Commissioner. The Commissioner's notice was challenged for being beyond the statutory time limit. However, the Commissioner's jurisdiction to take up adjudication proceedings was acknowledged.

6. The Tribunal analyzed the necessity of control panels for motor operation and their indirect relation to compressors. Statements from employees and dealers supported that control panels were not universally purchased with compressors, leading to the conclusion that control panels were not component parts of compressors.

7. Regarding Limitation, the Tribunal held that the first show cause notice was within time for a part of the demand, rejecting the argument that the entire claim was time-barred. Consequently, the impugned order was set aside, and the appeal was allowed based on the findings related to control panels and Limitation provisions.