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TMI Blog1998 (9) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... elding rectifier which the appellants are purchasing from the open market has to be considered as a component of complete welding machine along with welding torch and wire feeder or the same should be considered as a separate trading item. Consequently, whether the appellants would be entitled to the benefit of exemption Notification No. 175/86 or not and as to whether the demand is barred by limitation or not. 3. The Collector of Central Excise, Calcutta has held that a welding set comprises of three main components viz. (a) Rectifier, (b) Wire Feeder, (c) Welding Torch. The duty of the rectifier is to supply power to the whole set and to function as power source. The wire feeder supplies the welding materials required for welding and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of the Supreme Court in the case of Narne Tulaman Products (P) Ltd. v. C.C.E., reported in 1988 (38) E.L.T. 566 (S.C.). As regards the limitation the demand pertains to the period 30-1-1986 to 31-3-1986 and the show cause notice was issued on 4-1-1991. The Collector has justified invoking of larger period by observing that the appellant has wilfully and intentionally declared the rectifier as their trading goods inasmuch as they knew that no welding set/equipment can function without the rectifier. 4. On the other hand the appellants contention is that rectifiers having been purchased by them from outside and simply supplied along with the welding torch and wire feeder. At no stage these rectifiers become an integral and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the final product. In the instant case no rectifier is being assembled with any other part so as to become an integral part of the assembly welding. In support of the above submissions, strong reliance has been placed by the appellant on the Tribunal s decision in the case of Telco Ltd. v. CCE, Pune reported in 1987 (32) E.L.T. 583 (Tribunal). It was held in the instant case that the power packs and the Ribetting Guns manufactured separately have their own identity. The mere fact that the two are connected by a pipe line of 15 inch to 20 inch does not result in manufacture and emergence of a new product having an identity distinctly different from the power pack and Ribetting Guns. No doubt the latter cannot functions unless it is conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the rectifier was a trading good made by the appellant fully reflect upon their knowledge that the value of the same has to be added in the value of the final product. In respect of the limitation issue, reliance has been placed upon number of decisions. 5. We have heard Shri D.B. Desai, ld. Consultant for the appellants who vigorously argued on the above points before us. Shri T.P. Kumar, ld. SDR defended the Order of the Collector. 6. Ld. SDR has drawn our attention to Section Note 4 of Section XVI as also to page 1356 of H.S.N. the explanatory notes of Heading 85.15. He submitted that if pump and motor are supplied separately they would be assessed as pump and motor. But, if cleared together, the duty will be paid on the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier is presumed to have discharged its duty burden at the place of its manufacture. In fact there is no dispute on this point. Rectifier, we also note, functions as a power source. Power source is required for function of any electrical machine which cannot function unless it is connected with the power supply. Mere this fact, in our opinion, will not make the rectifier a part or component of the welding set. The ratio laid down in the Telco s case even though the same was in the context of the erstwhile Tariff Item 68, is fully applicable to the facts and circumstances of the instant case. Reference to Section Note 4 of Section XVI by the ld. SDR is not relevant inasmuch as the same will apply where components go to form a complete machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against them by the adjudicating authority is on the ground that they have intentionally declared the rectifier to be a trading item, we do not agree with this reasoning of the adjudicating authority. The appellants have not suppressed the fact that the assessable value of the rectifier is not being included in the assessable value of the welding set and the same is being supplied along with the other two items without payment of duty. Proper records were also maintained by the appellant. If the department felt at any point of time that the rectifiers value is to be included in the value of the welding set they should have directed the appellant to do so. After having made the declaration and having brought it to the notice of the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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