CARRIER AIRCON LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) When the petition for stay was heard for some time it was felt that the appeal itself could be disposed of. We, therefore, dispense with the condition for pre -deposit and proceed to dispose of the appeal.

(2.) Challenge in this appeal at the instance of the assessee is against the order passed by the Commissioner of Central Excise, Delhi dated 7 -1 -2003 confirming a demand of Rs. 28,00,000/ - and Rs. 65,77,852/ - raised under two show cause notices dated 7 -8 -2001 and 5 -4 -2002. The adjudicating authority imposed a penalty of Rs. 14,00,000/ - for the period 1 -7 -2000 to 31 -3 -2001 and Rs. 33,00,000/ - for the period 1 -4 -2001 to 31 -12 -2001 under Rule 173Q of the Central Excise Rules, 1944. The assessee shall also be liable to interest in terms of Section 11AA, if it failed to pay the amounts within the period stipulated under the Section.

(3.) The issue that is raised in this appeal is whether installation and commissioning charges received by the appellant has to be included in the value of chillers and air handling units manufactured and cleared by the appellant's unit. The assessee contended before the Commissioner that the installation and commissioning charges cannot be added to the assessable value of the goods manufactured and cleared from its factory in the light of several decisions of the Supreme Court as well as this Tribunal and also on the basis of Circular No. 643/34/2002 -CX., dated 1 -7 -2002 issued by the Central Board of Revenue. All these contentions were rejected by the Commissioner holding that the purchase order dated 16 -6 -2000 would show that the buyer had entered into a contract with the appellant for supply of 1 No. 60 TR chiller for Rs. 10 lakhs. But the appellant had valued the chiller at the time of its clearance from the factory under 'stock transfer invoice' only at Rs. 7,28,448/ -. According to the Commissioner the entire amount of Rs. 10 lakhs should have been treated as the assessable value as it was the amount received by the appellant in connection with sale of the chiller. It was on this basis the proposal in the demand notices were confirmed by the Commissioner.