2000 (4) TMI 438 - AT - Central Excise

Summary

Issues involved: Revenue appeal against Order-in-Appeal No. 120/91-C.E. dated 5-4-1991 of Commissioner (Appeals) regarding whether boughtout items supplied to customer's site are to be charged to duty as integral products of machines.

Summary:
The dispute in this case revolves around whether boughtout items supplied to customer's site are to be charged to duty as integral products of machines. The Revenue contends that such supply of boughtout items at the customer's site amounts to the manufacture of complete machines and seeks restoration of the duty and penalty imposed. On the other hand, the respondents argue that mere collection and separate sale of boughtout items does not constitute manufacture, citing various legal precedents and circulars to support their position.

The Tribunal carefully considered the submissions and records of the case and found merit in the appeal for several reasons. Firstly, the Revenue's ground of appeal on the dutiability of goods emerging at the customer's site was deemed beyond the scope of the original charge in the show cause notice, making it invalid. Secondly, if goods become excisable only at the customer's premises, duty could only be levied by the proper Central Excise Officer at that site. The Tribunal also noted that no assembly or erection of the boughtout items was done in the respondent's factory, distinguishing this case from that of a car manufacturer using boughtout items to assemble a full car.

Furthermore, the Tribunal upheld the Commissioner (Appeals)'s decision in following the Board's circulars and case laws on boughtout items. It was established that boughtout items installed at the customer's premises are not included in the value of excisable goods cleared from the manufacturer's factory. Therefore, the Tribunal rejected the Revenue's appeal, finding no compelling reason to interfere with the order-in-appeal.