1999 (9) TMI 479 - AT - Central Excise

Summary

Issues:
Stay applications due to non-pre-deposit of amounts under Section 35F of the Act; Inclusion of value of battery in assessable value of UPS system; Prima facie case determination; Interpretation of judgments regarding inclusion of bought-out items in assessable value; Financial hardship consideration for pre-deposit requirement.

Issue 1: Stay Applications and Non-Pre-Deposit
The appellant filed stay applications after their appeals were dismissed for not pre-depositing amounts determined by the Commissioner (Appeals) under Section 35F of the Act. The duty amount directed to be pre-deposited was significant, along with penalties. The appeals were related to demands for two different periods concerning the clearance of UPS systems where duty was paid only on the assessable value of the UPS, excluding the value of the battery, considered an integral part by the original authority.

Issue 2: Inclusion of Value of Battery
The Commissioner (Appeals) held that the appellants did not have a prima facie case regarding the non-inclusion of the battery's value in the assessable value of the UPS system. The appellant argued that judgments in similar cases supported their stance that the value of the battery should not be included if not cleared along with the UPS system. They emphasized that the battery was purchased separately and not included at the time of clearance, thus not required to be part of the assessable value.

Issue 3: Interpretation of Judgments
The appellant cited various judgments to support their argument, highlighting conflicting views on whether the value of bought-out items should be added to the assessable value. The Tribunal observed the varying stances taken in different cases and directed the appellants to partially pre-deposit the amounts due to the uncertainty in this aspect. The Tribunal emphasized the need for further examination to determine if the supply of the battery with the UPS system was a special request of customers.

Issue 4: Financial Hardship Consideration
The Revenue argued that the value of the battery should be added as it is an essential component of the UPS system, regardless of whether it was bought out. They contended that financial hardship was not a factor in this case and insisted on the pre-deposit of the entire amounts. However, the appellant disputed this, relying on Supreme Court judgments supporting their position that the value of bought-out items should not be included in the assessable value.

Conclusion
The Tribunal set aside the impugned orders and remanded the matter to the Commissioner (Appeals) for a decision on merits without further deposits, upon the appellants producing proof of pre-deposit within three months. The Tribunal directed the appellants to partially pre-deposit a specified amount, considering the arguable nature of the issue and the conflicting interpretations of relevant judgments. The stay and appeals were disposed of based on these terms.