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TMI Blog2017 (4) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... leared by the appellant in terms of section 4 of the Central Excise Act, 1944. Extended period of limitation - Held that: - the said assessee suppressed the fact with intent to evade payment of duty, there has been no attempt or elaboration in the notice to justify such an allegation - extended period and penalty not imposable. Appeal allowed - decided in favor of appellant. - E/533/2007 - 40632/2017 - Dated:- 18-4-2017 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Arshad Hidayatullah, Senior Advocate for the Appellant Shri S. Nagalingam, AC (AR) for the Respondent ORDER Per: Madhu Mohan Damodhar The facts of the case are that the appellants, inter alia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 of the Central Excise Rules, 2001/2002. 3. In appeal, the Commissioner (Appeals), vide the impugned order dated 18.4.2007, while setting aside the penalty imposed under Rule 25 of the Central Excise Rules, however, upheld the remaining part of the adjudication order. Aggrieved, the appellants are now before this forum. 4. Today, when the matter came up for hearing the learned Senior Advocate Shri Arshad Hidayatullah, reiterated the grounds of appeal also made the following submissions:- i) These goods are duty paid items, manufactured by third parties. ii) They are bought out items iii) They are supplied at the option of the purchaser and charged separately. iv) They are not attached / affixed to the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , along with the items manufactured by the appellant themselves. There have been correspondences going back from 2001. The entire manner and method of clearances has been brought to the knowledge of the department in these correspondences. In the circumstances, the issue of show cause notice only on 21.2.2006 is hit by limitation. x) Even admitting, without conceding, the maintainability of the show cause notice, no penalty was imposable under section 11AC of the Central Excise Act, 1944, for the reasons that since the entire issue per se had been in the knowledge of the department for more than three years and the appellant had not willfully suppressed any information from the department. 5. On the other hand, ld. AR, Shri S. Naga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added to the assessable value for the purpose of calculating duty liability thereon. In any case, once these bought out items are used at the customer's site for installation of the storage system, they would become part of the immovable property attached to the ground and hence would not be exigible. This is indeed the view taken by the Tribunal in the case of Kerala State Electronics Development Corporation - 2014 (171) ELT 281 (Tri. Bang.) which has been affirmed by the Hon ble Apex Court as discussed supra. In a subsequently decision, the Tribunal in the case of Kerala State Electronics Development Corporation Vs. Commissioner of Central Excise, Trivandrum - 2008 (224) ELT 88 (Tri. Bang.) has gone on to observe that even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mains that they are all bought out items on which excise duty has already been paid. Therefore, there is no reason to add the value of these bought out items to the value of the goods supplied by the appellants. There is also no justification for imposing any penalty on the appellant in both the cases and for invocation of the longer period. Therefore, the appeal is allowed with consequential relief if any. 9.1 This view has been further fortified by the Tribunal in the case of Neycer India Ltd. Vs. Commissioner of Central Excise, Trichy - 2005 (192) ELT 620 , wherein the Tribunal had held as follows:- 4. We have gone through the rival contention. The point at issue is whether the bough-tout items are accessories or parts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid fittings are not manufactured by the assessee. It is also an admitted position that the assessee supplied the same to those buyers only who asked for that and in such a situation the assessee buys the aforesaid components from the market and supply to the buyers at their option. In these circumstances, the Tribunal has rightly declined to add the value of the aforesaid components which are not the part of flushing cistern manufactured by the assessee. Even otherwise, the amount of tax involved is not much. For these reasons we dismiss this appeal. 10. Respectfully following the decisions / judgments cited supra, we hold that the value of bought-out items like bolts, nuts, corner plate etc. cannot be included in the assessable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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