9911796707
TMI Blog1995 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. They received advance on account of part of the contracted price of the vibrating feeders. By the impugned order the Collector (Appeals) held that the cost of bought out motor and mandatory spares and also the interest on the advance payment received by the respondents could not be treated as part of the assessable value of the vibrating feeders. The Collector (Appeals) also held that erection and commissioning charges also could not be deemed as part of the vibrating feeders. Being aggrieved by the order passed by the Collector (Appeals) the Department has filed the present appeal. 2. On behalf of the appellants Shri B.K. Singh, Ld. SDR stated that electric motor being an integral part of the vibrating feeder erected and supplied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri N. Mookherjee, Ld. Advocate submitted that the respondents were procuring duty paid electric motors from other manufacturers and even though the motor in question was coupled with the vibrator for imparting power, it was not an integral part of the vibrator. He contended that under these circumstances the price of such duty paid bought out motor was correctly held as not includible in the assessable value of the vibrator. He added that the Collector (Appeals) had also correctly held that interest on advance amount paid by the buyer did not form a part of the assessable value of the feeder. He contended that the interest on advance received by the respondents could not form a part of the assessable value only since the sale price of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents engineers at the customer s premises. About 30% contracted price is paid by the customer at the time of placing of the order and the balance in parts at the time of delivery and after satisfactory erection and commissioning. Since, the respondents do not manufacture electric motors required for the operation of the vibrators, they procure them as duty paid items from other manufacturers. The respondents case is that the motor in question being duty paid bought out item and used for running the vibrating feeders without being incorporated in the machine as an integral part, its value would not be includible in the assessable value of the vibrating feeder. In this regard we find from one of the purchase orders available in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether notional interest on deposits received by manufacturers of machines from customers could be deemed as a part of the assessable value of the machine by the Madras High Court in the case of Lakshmi Machine Works Ltd.v. Union of India, reported in 1992 (57) E.L.T. 211 has held that such interest would be includible in the assessable value only if the department is able to establish that such additional consideration has a nexus to the sale price. Paras 17 and 18 of the said judgment are reproduced below :- ******* 7. It is seen that in the case of Transformers Electricals Kerala Ltd. v. Collector of Central Excise, reported in 1993 (63) E.L.T. 715, the question whether the interest free advance collected by the manufacturer from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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