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TMI Blog1994 (12) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of assessment under the Act. The learned Counsel submitted that the impugned order is not prima facie sustainable and urged the following pleas :- Cable gland is not a component part of FPLE which in fact is an accessory purchased from outside and supplied and which is purely optional and the petitioner is also not manufacturing the said `cable gland . It is only a bought out item purchased by the petitioner in the course of their trading activity and it is open to the buyers either to buy or not to buy cable glands which are sold by the petitioner Company as part of the petitioner s trading activity and as an accessory to FPLE, when the petitioner is not manufacturing the same, the petitioner cannot be called upon to pay duty much less value of the same includible in the assessable value of the goods manufactured and cleared by the petitioner viz. FPLE. The goods i.e. FPLE is manufactured by a number of manufacturers from whom any body can buy and there have been number of instances where the petitioner has cleared on payment of duty, FPLE without accessories i.e. cable gland and the catalogue of the petitioner would show that the goods in question is only an accessory. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y depend upon what is actually cleared at the factory gate and not on hypothetical basis as to what should have been cleared, with reference to the classification list. 3. The petitioner is also facing financial hardship and acute liquidity problem and the total gross profit for the year ending 31-3-1994 was Rs. 7.71 lakhs and the net profit was only Rs. 71,000/- and a sum of more than Rs. 5 crores is due to the petitioner from sundry debtors and the petitioner made a turnover of over Rs. 3.6 crores. 4. Shri J.M. Jeyaseelan, the learned DR adopted the reasoning in the impugned order and contended that cable gland is an indispensable component part used in the FPLE in hazardous areas. It was further contended that the petitioner has sold cable gland with FPLE and the value of the same would be includible in the value of the assessable value of FPLE and the Supreme Court in the case of Union of India v. TELCO instead supporting the case of the petitioner would only support the reasoning of the learned Collector in the impugned order. The learned DR further submitted that the Collector has observed in the impugned order that in very many cases purchase orders are with cable gland ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices separately for cable gland and for electrical fittings and collected the amount. It appeared that the assessable value determined by the Co. excluding the value of bought out cable gland appeared to be not correct and duty should have been paid on the aggregate value of electrical fittings including the value of such cable gland. Thus, it appeared that there was short payment of duty to the extent payable on the value of such cable gland. 6. The above reasoning would bear out that cable gland is absolutely an indispensable item for use of the FPLE in hazardous areas. 7. The plea in regard to applicability of longer period of limitation has been dealt with in the impugned order as under :- Regarding suppression of facts, I find that the assessee had not declared the item in question in the classification list filed with the department during the material period viz. 1989-90, 1990-91 and cleared the same without payment of duty. Moreover it is seen that the separate set of invoices with two different serial numbers and the fact of supply of cable gland alongwith the flame proof lighting fittings has not been intimated to the department. The adjudicating authority in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n S.L.P. (C) No. 12449/94 filed on behalf of the Union of India against the judgment and order dated 18-11-1992 of the High Court of Bombay in Writ Petition No. 2278 of 1986 reported in 1993 (64) E.L.T. 171 (Bom.) (TELCO v. U.O.I. and Others) The High Court has allowed the writ petition following its earlier judgment reported in 1991 (52) E.L.T. 500 in the case of this very assessee. The ratio of the High Court in the earlier judgment is to be found in the following passage. In our judgment, when the chassis as cleared with four tyres, then it is not permissible for the excise authority to claim that the assessable value of motor vehicle chassis should be fixed by taking into consideration the value of six tyres only, because the specification given in the classification list indicates that the chassis can be supplied with six tyres. It is not for the excise authorities to determine whether the customer should purchase the chassis with four tyres or six tyres and the liability of the company to pay excise duty depends upon what actually was cleared at the factory gate and not on hypothetical basis as what should have been cleared with reference to the classification list. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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