JOCIL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, GUNTUR

JUDGEMENT

(1.) THE appellants are aggrieved with OIA No. 131/04 -C.E., dated 22 -6 -2004. The appellants are engaged in the manufacture of soaps, soap noodles, glycerine, steric acid flakes, etc. They also manufacture certain capital goods for captive use and also for supply to buyers/sister units. They manufactured and cleared three numbers of Hydrogen gas manifolds which also required 402 Nos. of cylinders fitted to the manifolds 134 Nos. in each manifold. They cleared the three manifolds (with 402 cylinders) vide their dispatch challan No. 25, dated 12 -4 -1998, No. 71 dated 27 -4 -1998 and No. 76, dated 28 -4 -1998. They cleared the said gas manifolds to Andhra Sugars Ltd. The designing of manifolds was done by their own engineers and they had paid excise duty at 13% on the assessable value of the single manifold arrived at by them on cost construction method. The revenue, took the view that this cost was not included in the cost of gas cylinders and ought to have been assessed on hydrogen gas manifolds. It was alleged that they have not informed the department regarding clearances of the said three gas manifolds at the time of their clearance. After due process of law, the demands have been confirmed. The appellants contention was that the manifolds are separately supplied as a fitment part and they are not essential part of the gas cylinders and that they had made all the declarations to the department and all the facts had been brought to their notice. Hence, larger period was not applicable. However, their plea has been turned down. Learned Consultant Shri K.S. Venkataramani pointed out that the issue is covered in their favour by the Super Cold Refrigeration Systems Pvt. Ltd. v. CCE rendered by this bench by Final Order No. 1823/2004 dated 17 -11 -2004 wherein, in similar circumstances, the Bench has allowed the appeal on the ground that separate equipments cleared and payment of duty and its value is not required to be added along with air -conditioners. He submitted that the ratio of the Apex Court judgment rendered in the case of CCE v. Acer India [2004 (172) E.L.T. 289 (S.C.)] also applies to the facts of the case wherein the software was cleared independent of computer and the Apex Court has held that the value of the software is not required to be added to the value of computers. Learned advocate submitted that the Commissioner has given findings and has clearly held that the manifold is a structure for holding the cylinders and therefore its value is required to be added to the value of the gas cylinders as the cylinders cannot be cleared without the manifolds. Learned DR defended the impugned order.

(2.) ON a careful consideration, we notice that the stand taken by the appellant is a just and correct stand. The appellants have shown from their paper book that all the facts were declared to the department and that the department was aware of the clearances of gas cylinders in the manifolds. The manifolds are steel structures which hold the gas cylinders when they are placed in a lorry. The photographs exhibited clearly show that they are in the form of steel crates. The appellants have already paid duty of 13% on the said manifolds and they are not part and parcel of gas cylinders. The view expressed by the Tribunal in the case of Super Cold Refrigeration System applies to the facts of the case. The findings recorded in para 3 are reproduced below. On a careful consideration and examination of both the impugned orders, we are satisfied that the appellants had purchased the Air Handling Equipment independently from the open market in Delhi. The appellants have raised invoices and supplied the same by paying the sales tax at 12.5%. It is not the case of the Revenue that these documents are forged ones and the appellants have not paid the KST. When the appellants are registered with Karnataka Sales Tax Authorities and have paid sales tax on the purchased items viz., Air Handling Equipments, then it cannot be said to have been manufactured within the premises of the appellants. It is not the case of the department that the appellants have manufactured these items and they had all the facilities for manufacturing the same. There is no independent evidence of the appellant having manufactured it in their premises. Therefore, the ruling relied by the appellants clearly apply to the facts of the case. The appellants had not manufactured the Air Handling Machines but had purchased the same from the open market from Delhi and supplied it to their customers by paying the sales tax. The ratio of the judgments relied clearly apply to the facts of the case. Respectfully following the same, the impugned order is set aside and the appeal is allowed with consequential relief. The Apex Court in the case of Acer India Ltd., also held that value of software is not to be added to the value of computers. The ratio applies to the facts of the case. The counsel also relied on large number of judgments of the Tribunal which are as follows :

(3.) IN view of all the above noted judgments and in the fact that there is no suppression in the matter the impugned order is set aside and appeal is allowed with consequential relief if any.