The appellant manufactured and sold Draw Texturizing Machines, ...

Machine Parts Assembled At Buyer's Site Exempt From Service Tax.

Case Laws     Service Tax

October 9, 2024

The appellant manufactured and sold Draw Texturizing Machines, which were cleared in parts as it was not feasible to transport the entire machine in one truck. The appellant followed the prescribed procedure under Trade Notice No.MP/29/83 and intimated the jurisdictional Central Excise department. As the machinery could not be cleared assembled, the appellant was obligated to assemble and install the machine at the buyer's premises. The contract was undisputedly for the sale of the machine, and no separate service was involved. The appellant was registered with the Central Excise department, discharging excise duty and filing periodic returns. The appellant did not charge any amount towards service, and the total value, including erection charges, was billed for the manufacture and sale of the machine. The appellant intimated the department about the piecemeal supply as per the Trade Notice and disclosed that the machines would be assembled and erected at the customer's site. Therefore, there was no suppression of facts with intent to evade duty payment. Consequently, the extended period for demand was wrongly invoked, rendering the demand time-barred. The impugned orders were set aside, and the appeal was allowed.

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