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TMI Blog2009 (7) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to show cause as to why short paid Central Excise duty amounting to Rs. 3,43,588/-, Rs. 6,875/- Education Cess and Rs. 3,436/- Secondary and Higher Education Cess payable on the cost of laying and jointing charges on the cost of rubber rings should not be recovered under Section 11A of the Central Excise Act, 1944 (hereinafter referred as the Act) along with interest under Section 11AB of the Act and penalty under Rule 25 of the Central Excise Rules read with Section 11AC of the Act should not be imposed; that on adjudication, the demand raised in the SCN-cum-Demand Notice was confirmed along with interest, besides imposing equal penalty under Rule 25 holding that the transaction value under Section 4 of the Act includes any amount which is paid or payable by the buyer to the assessee, on account of the factum of sale of the goods and receipts, recoveries or charges incurred or the expenses provided for in connection with manufacturing, marketing, selling of the excisable goods become part of the price payable for the goods sold and if the parts and components are brought to the site, are also become part of transaction value being additional consideration . 2. Being agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the product does not arise; (ix) that the above position has been made clear on the basis of Board s Order No. 58/1/2002-CX., dated 15-1-2002 issued under Section 37B of the Act and the same has been further clarified by Circular No. 643/34/2002-CX., dated 1-7-2002 after introduction of transaction value; (x) that it is settled position of law that Trade Notice and CBEC instructions are binding on Revenue and the appellants relied on the following decisions - (a) CCE v. Dhiren Chemicals - 2002 (143) E.L.T. 19 (S.C.); (b) CCE v. Dhiren Chemicals - 2002 (139) E.L.T. 3 (S.C.); (xi) that the adjudicating authorities have neither commented anything on this issue nor have dealt with in the adjudication orders which makes orders as non-speaking orders; (xii) that the adjudicating authorities placed reliance on the irrelevant judgments which are as follows - (a) Paper Products Ltd. v. CCE, Mumbai - 2007 (214) E.L.T. 161 (S.C.), which is related to inclusion of amortized cost of cylinders in the laminated products which are final products; (b) Hyderabad Industries Ltd. v. UOI - 2000 (115) E.L.T. 593 (S.C.) which is related to valuation of imported goods under Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same appellant covering the earlier period. After dispensing with pre-deposit, I take the main appeal itself for final decision. The lone issue to be considered in the instant case, is whether the cost of laying and jointing charges of PSC pipes and the cost of rubber rings are to be included in the assessable value of the final product viz. PSC pipes of the appellants. The Assistant Commissioner concluded that the transaction value includes cost of erection/installation and commissioning and also bought out items (i.e. rubber rings). For coming to the above conclusion, he placed reliance on the following case law - (a) M/s. Paper Products Ltd. v. CCE, Mumbai - 2007 (214) E.L.T. 161 (S.C.), (b) Hyderabad Industries Ltd. v. UOI - 2000 (115) E.L.T. 593 (S.C.), (c) Sagarika Acoustronics Pvt. Ltd. v. CCE, Mumbai - 2005 (185) E.L.T. 149 (Tri.), (d) Usha Martin Ltd. v. CCE - 2007 (216) E.L.T. 122 (Tri.), and (e) Guest Kleen Williams Ltd. v. CCE, Kolkata - 2007 (218) E.L.T. 596 (Tri.). 4.1 Whereas, the appellant claim that the cost of erection/installation and commissioning (laying and jointing of PSC pipes with rubber rings) and cost of bought out items are post-manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace of removal . (ii) Gordhandas Desai Ltd. v. CCE, Vadodara-I, 2005 (179) E.L.T. 557 (Tri. Mumbai) - Charges of erection and commissioning not includible in the assessable value even in respect of new Section 4 with effect from 1-7-2002 . (iii) Rhino Machines Pvt. Ltd. v. CCE, Vadodara-I, 2005 (181) E.L.T. 63 (Tri. Mumbai) - Fabrication, erection and technical supervision charges would not form part of assessable value of goods cleared form factory The appellants had also relied on the following case laws relating to valuation of bought out items before the lower adjudicating authority. They are as follows :- (i) Collector of Central Excise, Vadodara v Multiplex Packaging Pvt. Ltd. - 1999 (105) E.L.T. 374 (Tribunal) - Cost of bought out plastic cap not includable in the assessable value of aluminium collapsible tubes when there is no dispute that tubes were removed in uncapped condition from assessee s factory to their sister concern. (ii) Fujitsu Indi Telecom Ltd. v CCE, Chandigarh - 2003 (151) E.L.T. 354 (Tri.-Del.) - Bought out items for telephone exchanges supplied separately and directly to the sites of telephone exchanges - No telephone exchange either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involving supply of large number of components, machinery, equipments, pipes and tubes etc. for their assembly/installation/erection/integration/inter-connectivity on foundation/civil structure etc. at site, will not be considered as excisable goods for imposition of central excise duty . The Board also has further clarified under para 4(i) that For goods manufactured at site to be dutiable they should have a new identity, character and use, distinct from the inputs/components that have gone into its production. Further such resultant goods should be specified in the Central Excise Tariff as excisable goods besides being marketable . 4.4 From the above clarification, it is very clear that the appellant had not manufactured any new excisable commodity which is distinct from the product cleared by them from their factory. The appellant, with the bought out items i.e. rubber rings undertook the activities of the laying and jointing of PSC pipes at the site which had ultimately become the water supply pipeline embedded to earth and consequently, became the immovable property. In view of the clear- j cut clarification of the Board, the adjudicating authority failed to give any findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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