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TMI Blog2018 (8) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... ule but it includes not only the cost of the transformer manufactured by them but also other bought out items as explained by the Learned Counsel for the respondent herein and also as recorded in the draft audit report by the Central Excise Department themselves. The entire amount cannot be considered as the cost of transformer sold to M/s APSPDCL. The correct way of assessing the value of transformer, in such a case, is treating the same as captively consumed by the respondent in executing the contract given to them by M/s APSPDCL. Appeal dismissed - decided against Revenue. - E/1097/2009 - FINAL ORDER No. A/30810/2018 - Dated:- 25-7-2018 - Mr. M.V.Ravindran, Member (Judicial) and Mr. P. Venkata Subba Rao, Member (Technical) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish information whether the accessories used along with the transformers for installation were manufactured by them or they were bought from outside and also to produce relevant documentary evidence and that the assessee did not respond despite reminders and therefore it is construed that all the accessories were also manufactured/fabricated by the assessee themselves and supplied or provided along with the transformers. It is therefore alleged that there is a clear sale price of the transformers and they should accordingly be valued as per Section 4(1)(a) of the Central Excise Act based on the transaction value. It is alleged that the assessee has erred in valuing the transformers as if they have been used for captive consumption unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were captively consumed and there was no dispute. It is further alleged that in the case of M/s Koya Company Industries Pvt Ltd [2007 (213) ELT 691 (Tri.-Chennai)], the transactions were between interconnected undertakings and therefore not relevant to the issue on hand. It was therefore prayed that the Order-in-Original passed by the Commissioner may be set aside. 4. Learned Departmental Representative reiterated the above arguments and vehemently argued that once the transaction value of the goods is available in the contract, even if the contract is on a turnkey basis, such value should be considered for the purpose of Central Excise Duty. It is his further submission that Rule 8 pertaining to captive consumption does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining to these turnkey projects were completed and some are yet to be completed. The turnkey project is for execution of system improvement project works for conversion of existing LT network into High Voltage Distribution system. The execution of turnkey project involves procurement of many items such as disk insulators, MS stay set poles, CI earth pipe, cables, transformers, service elements (labour) etc. The transformer is the only item manufactured by the assessee . The assessee transports all these items to the works at site on their own vehicles. The payments are received basing on the progress of the turnkey project and not item wise from the A. P. Power Distribution Company. The final payment is made only when the entire project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when called for the CAS-4 statement relevant to the audit period for knowing the actual cost of transformer cleared, the assessee could not produce the same. The assessee vide their letter dated 12.10.2007 informed that they will submit the Cost Audited Statements later to the audit. The audit when asked for immediate payment of duty based on the escalation in the cost of material, the assessee obliged the request of the Audit and paid differential duty based on the cost statement prepared by themselves provisionally to the tune of ₹ 45,57,356/- towards Cenvat with Ed.cess being ₹ 91,147/- and S H Ed.cess being ₹ 6,252/- vide TR6 challan No. 3 4 both dated 10.10.2007 which is sum total of ₹ 46,54,755/-. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be taken as a cost of transformer manufactured by them. 8. Having considered both sides and the facts of the case, we find that in this case, the Learned Commissioner was correct in holding that there was an indivisible turnkey contract for supply of transformers, other materials and also installation and commissioning of the same. The cost of the materials has been given in the schedule but it includes not only the cost of the transformer manufactured by them but also other bought out items as explained by the Learned Counsel for the respondent herein and also as recorded in the draft audit report by the Central Excise Department themselves. Therefore the entire amount cannot be considered as the cost of transformer sold to M/s APSPD ..... X X X X Extracts X X X X X X X X Extracts X X X X
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