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TMI Blog2008 (2) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... nd K.K. Agarwal, Member (T) [Order per : Jyoti Balasundaram, Vice President]- The factory of the respondents herein who are engaged in the manufacture of HDPE pipes and fittings falling under Chapter 39 of the first schedule to the Central Excise Tariff Act, 1985, was visited by preventive officers of central excise on 8.9.1998 and on verification of the stock of finished goods, shortage of stock compared to the balance recorded in the RG1 register was detected. The finished goods, i.e. HDPE pipes of various qualities involving duty of Rs.3,75,791/-, were found short. The assessee paid central excise duty on such shortage. Further scrutiny of records revealed that the assessees cleared their goods, viz. HDPE pipes sprinkler irrigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier for assembly of sprinkler coupler and PCN and after assembly, the items were sent to various depots from where the goods were finally sold to customers. He categorically admitted that saddle was very essential in nature and without it, sprinkler cannot function and that one PCN is required for installing on sprinkler irrigation system essential for functioning of portable irrigation system. 2 . In the light of the above, show cause notice proposing confirmation of duty already paid on finished goods found short and proposing recovery of duty of Rs.12,20,623/- on the clearance of sprinkler coupler during the period November 1996 to January 1999 and PCN during the period November 1996 to August 1998 and proposing recovery of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the verification, confirmation of duty of Rs.3,75,791/- by the Additional Commissioner is required to be upheld. We order accordingly. 5. As regards bought out items like saddle and PCN, what is relevant for determination of the issue as to whether their value is required to be added to the assessable value of goods manufactured by the respondents is whether they are integral parts of the sprinkler irrigation system. The Commissioner (Appeals) has only considered that the final products of the respondents are pipes and fittings and has not examined the question as to whether bought out items form an essential part of the sprinkler irrigation system which was cleared to various depots for ultimate sale to customers. The deputy manag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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