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TMI Blog2016 (3) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... s and as per the terms and conditions of the agreement, the price of barbed wire is included in the assessable value. The learned counsel for the respondent placed reliance in the case of Coca-Cola India Pvt. Ltd. vs. CCE, Pune [ 2009 (8) TMI 50 - BOMBAY HIGH COURT ] wherein held that burden of service tax may be borne by the ultimate consumer and not by any intermediary and if the value of the input or input service has been included in the assessable value, then credit should not be denied - Decided in favour of assessee - Appeal No. E/1482/10-Mum - Final Order No. A/85506/2016-WZB/SMB - Dated:- 27-1-2016 - S. S. Garg, Member (J) For the Appellant : Shri S V Nair, Assistant Commissioner (AR) For the Respondent : Shri Archit Agarwal, C.A. ORDER The present appeal is directed against the order of the Commissioner (Appeals) dated 15.6.2010 vide which the Commissioner (Appeals) has dismissed the appeal of the Revenue and set aside the order-in-original. 2. Briefly the facts of the case are that the respondent is engaged in the manufacture of transmission line towers and parts thereof falling under Chapter Heading No. 73082011 of the Central Excise Tariff Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecedents. The present appeal has been filed by the Revenue against the order-in-appeal. 3. The learned AR submitted that a plain reading of the definition of input' as contained in Rule 2(k) of the Cenvat Credit Rules, 2004 reveals that the order-in-appeal in extending the benefit of cenvat credit on barbed wire is contrary to the provisions as contained in the Cenvat Credit Rules, 2004 as it cannot be considered as input. He further submitted that the input is eligible for cenvat credit only if used in or in relation to the manufacture of final products. He also submitted that in the present case, barbed wire is neither used in or in relation to final product whether directly or indirectly nor is contained in the final product and there is no nexus with the manufacturing process. He further submitted that barbed wire is not supplied by the assessee to all its customers but only to M/s. Powergrid Corporation of India Ltd. and that too in terms of the contract entered between the assessee and the customer and moreover it is optional and not mandatory to supply the barbed wire with the transmission towers. He also submitted that accessory is something that is extra or additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivered along with the tower. He further submitted that the conditions laid down by the Tribunal in the case of Jayshree Industries vs. CCE reported in 1993 (63) ELT 492, are fully satisfied in this case and therefore barbed wire being accessory is covered in the definition of input contained in Rule 2(k) of the Cenvat Credit Rules, 2004. He also submitted that the invoices issued by the respondent to sell the towers specifically included the value of the barbed wire in the assessable value. Duty has been paid on the whole amount including the value of the barbed wire. He further submitted that in such situations, the respondent is entitled to cenvat credit of duty paid on barbed wire as held in the following judgments:- (i) Jayshree Industries vs. CCE reported in 1993 (63) ELT 492 (T); (ii) Ultrapack vs. CCE, Hyderabad reported in 2005 (192) ELT 540 (T); (iii) CCE, Surat vs. Bothra Exports Pvt. Ltd.reported in 2006 (205) ELT 562 (T). 4.2 He further submitted that the department never raised any objection while including the value of the barbed wire in the assessable value and therefore the respondent is entitled to take credit of duty paid on barbed wire apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; clearly shows that the input means and includes accessories of the final product cleared along with the final product. 6.1 Further, the Hon'ble Supreme Court in the case of Annapurna Carbon Industries Co. vs. State of Andhra Pradesh (AIR 1976 SC 1418) held as under:- Para 10. We find that the term accessories is used in the schedule to describe goods which may have been manufactured for use as an aid or addition. A sense in which the word accessory is used is given in Webster's Third New International Dictionary as follows : an object or device that is not essential in itself but that adds to the beauty, convenience or effectiveness of something else. Other meanings given there are : supplementary or secondary to something of greater or primary importance , additional , any of several mechanical devices that assist in operating or controlling the tone resources of an organ . Accessories are not necessarily confined to particular machines for which they may serve as aids. The same item may be an accessory of more than one kind of instrument. 6.2 I also take note of another decision of the Hon'ble Supreme Court in case of M/s. Mehra Brothers v. Jt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject, as of a car, appliance, etc. . Other definitions for the accessory are found in the Advanced Law Lexicon (3 rd edition, 2005) and include the following: Something of secondary or subordinate importance: Something contributing in subordinate degree to a general result or effect;an adjunct or accompaniment; 6.4 Further, I find that the Tribunal observed in the case of Jayshree Industries cited supra, that in case of items supplied along with certain gadget, the item would qualify for credit in the light of the Hon'ble Supreme Court's judgment in the case of CCE vs. Jay Engineering Works reported in 1989 (39) ELT 169 (SC), provided the answers to the following questions are in the affirmative: (a) Whether the items are essentially required for the operational needs of the gadget; (b) Whether they are compulsorily supplied with the gadget at the point of delivery through the factory gate; (c) whether its value is included in the value of the gadget at the factory gate. 7. Now the question is whether in the case of respondent all the essential requirements are fulfilled or not. In my opinion, all the conditions are fulfilled in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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