CX - Demand dropped on ground of time bar but allegation upheld - observation on merits challenged by appellant will not prejudice them as issue is not of recurring nature: CESTAT
By TIOL News Service
MUMBAI, DEC 26, 2016: THE appellant is manufacturing LPG Bullets and clearing to customers' site. The erection and installation of LPG Bullets is also carried out by the appellant at customers' site and for which additional amount is recovered.
The case of Revenue is that fabrication was partly done in the appellant's factory and partly at customers' site and, therefore, the additional amount recovered is includible in the assessable value.
The adjudicating authority dropped the demand on the ground of time bar. However, on merits, it was viewed that the amount recovered on account of spot fabrication for all LPG Bullets should from part of assessable value.
Unhappy with this observation of the adjudicating authority, the appellant filed an appeal before the Commissioner (Appeals) but the same was rejected.
And so, the appellant is before the CESTAT. This was in the year 2000.
The appeal was heard recently.
The appellant submitted that the LPG Bullets is completely manufactured in the factory of the appellant and cleared to the site of the buyer and at site only erection and installation is carried out by way of civil work and welding; that since the LPG Bullets was completely manufactured, other activity at site is other than the manufacturing activity; that since the erection and fabrication activity is of immovable structure, therefore, the same is not liable for duty.
The Bench enquired as to whether the issue is of recurring nature.
The appellant could not show any material that the issue is of recurring nature.
The Bench observed -
"4. … We find that the entire demand has been dropped by the adjudicating authority and upheld by the Commissioner (Appeals) on the ground of limitation even though some observation was given by the adjudicating authority and Commissioner (Appeals) on the merits of the case but the demand does not survive and same stand dropped. Since the issue is not of recurring nature there is no consequential adverse effect of the observation given by the lower authorities on appellant. We are, therefore, the view that observation on merits which was challenged by the appellant will not prejudice the appellant. We therefore do not need to address the merits of the case. As per above discussion without expressing any views on merits of the case, the impugned order is sustained…"
The appeal was dismissed.
In passing: Incidentally, in the appellant's own case and in the matter of an appeal filed in the year 2005, the Bench had while allowing the appeal - 2016-TIOL-2546-CESTAT-MUM observed thus -
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CX - Appellant clearing machinery to their customer and discharging CE duty on the value shown on invoices - appellant also recovered additional amount by invoicing the same separately as erection charges - case of the Revenue is that such ‘erection' charges should be includible in the AV as per definition of Transaction value u/s 4 of CEA, 1944.
Held: Issue is no more res integra as identical issue in the case of Petal Engineers - 2016-TIOL-643-CESTAT-MUM was decided by the Bench holding that erection charges, installation and commissioning of machinery are not includible in AV as they are not related to the sale of goods but are for an independent and distinct identified activity; these are also not related to sale of machinery - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 5, 6]
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(See 2016-TIOL-3319-CESTAT-MUM)
