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Navom Infra Power Pvt. Ltd. and Others V/S CCE & ST, Jaipur and Others.

    Excise Appeal Nos. 50293-50296 of 2017 (Arising out of Order-in-Original No. JAI-EXCUS-000-COM-14-16-17 dated 28.10.2016 passed by the Commissioner of Central Excise Jaipur (Raj)) and Final Order Nos. 50216-50219/2018

    Decided On, 10 January 2018

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi

    By, MEMBER

    For Petitioner: Amit Jain and Rahul Tangri, Advocates And For Respondents: R.K. Mishra, AR

Judgment Text

1. The present appeals are cross appeals filed by the appellant as well as by the Department against the order in original No. Jai-EXCUS-000-Com-14-16-17 dated 28.10.2016. Period of dispute is April, 2009 to March, 2013.

2. Brief facts of the case are that the appellant is engaged in supply of various bought out items known as "BPL Kits" to provide the electricity connection to below poverty line (BPL) households. Such BPL kits are provided under the Rajiv Gandhi Grameen Vidyutikaran Yojna of the Government of India and they are procured from nodal agencies like State Electricity Boards, NHPC, NTPC, Power Grid Corporation of India Ltd. etc, for ultimate supply to the BPL households.

3. The BPL Kits comprise, inter alia, of all or some of the following items:

i) Board (Wooden or Polycarbonate)

ii) D.P. Switch

iii) Kit-Kat Fuse

iv) Piano Switch

v) Bulb Holders

vi) CFL Bulb

vii) MCB

viii) PVC Saddle

ix) PVC Elbow

x) Nuts, Bolts, Screw & GI Wire

xi) PVC/GI Pipe etc.

4. The department demanded the duty on these items. Being aggrieved, the appellants have filed the present appeals.

5. On the other hand, for computation of period of 5 years which goes against the SSI exemption, the department has filed the present appeal.

6. With this background, we heard Shri Amit Jain, Shri Rahul Tangri and Shri R.K. Mishra, learned counsel for the parties and gone through the material available on record.

7. After hearing both the sides, it appears that identical issue has came up before the Tribunal for consideration in the case of M/s. TGL Enterprises Pvt. Ltd. vs. CCE Delhi I [Final Order No. 58605-58606/2017 dated 28.12.2017] wherein it was observed that:-

15. We note that except in two categories of clearances, there is no evidence to show that the appellant-assessee is even putting together an assembly of various electrical components and accessories in order to make any new identifiable product. Here, it is necessary to find that even if the goods were cleared and identified as BPL Kit, whether such goods can at all be considered as a new excisable item. Here, the main thrust of the Revenue is that there is an assembly process undertaken by the appellant-assessee. We note that mere putting together of two or more items by itself will not make an assembly of a new item. In M/s. Narang Latex and Dispersions (P) Ltd. : 2001 (134) ELT 482 (Tri.- Bby.), the Tribunal held that when the appellant cleared the nipples manufactured by them by attaching them with bought-out bottles, the process of attaching the rubber nipples with the bottles and packing together for clearance will not amount to manufacture. The said order of the Tribunal was affirmed by the Apex Court, 2000 (139) ELT A-392 (SC). In M/s. Shivam Enterprises: 2017 (345) ELT 550 (Tri.-Del.), assembling audio cassettes without magnetic tap was found to be not a process of manufacture. In M/s. Medtronics (P) Ltd., 2006 (199) ELT 347 (Tri.- Bby.), the Tribunal held that "Custom pack" made by the appellant by adding parts like plastic tubes, connectors, blood filters, caps, oxygen, etc. cannot be held to be a process of manufacture. No new product emerges when these parts are put together in a pack for a ready-to-use condition. The said decision of the Tribunal was affirmed by Hon'ble Gujarat High Court in : 2015 (323) ELT 738 Gujarat and further affirmed by the Apex Court reported in 2015, ELT A48 (SC).

16. In the present case, the Revenue seeks to classify the product cleared by the appellant-assessee under tariff heading 85371000. We have perused the various types of items in different combinations cleared by the appellant-assessee. Samples were shown at the time of hearing. We note that the appellant-assessee did not undertake any process in the form of assembling the electrical components and accessories which will result in a new identifiable product having a different character or use. The electrical components or switches are mounted on the board before clearance. The goods cleared by the appellant were generically called as 'BPL Kit.' It is apparent that the method of clearance is mandated by the terms of agreement with their clients. There is no standard commercially identifiable item which is available for sale or purchase in the market. In other words, there is no 'BPL Kit' commercially known and marketed. The clearances made by the appellant-assessee to the various clients as per their requirement are not any new manufactured product, commercially identifiable as 'BPL Kit.'

17. The original authority upheld the duty demand partly, on the ground that the process of mounting two components/items on the wooden or plastic board would amount to manufacture. We are not in agreement with such finding. The electrical components, MCB and kit-kat fuse mounted on the board do not lose their identity and assume a different character and use after such process. The MCB and kit-kat fuse are mounted on the board for their function as electrical components. The addition of these two on the board does not create a new commercially identifiable product in the present case. The Revenue did not produce any evidence or did not even assert that these are commercially known and marketed product. The electrical components retained their name, character and use and there is no new commercially identifiable product emerging in the present case. Further, we find force in the appellant's contention against the classification adopted by the original authority in respect of part of the clearances made by them The mounted electrical components on the board does not make the board as an item for electric control or the distribution of electricity.

18. In view of the above detailed analysis, we find that the appellants have not manufactured any dutiable item attracting central excise levy during the material time. They have got themselves registered and paid central excise duty w.e.f. December, 2013 as they themselves

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started manufacturing certain items from that period. We find the impugned order is not sustainable in so far as it confirms certain duty liability on part of the clearances, on the appellant-assessee. We upheld the original authority order with reference to the finding for dropping the demand raised against the appellant-assessee. 19. In view of the above, we allow the appeal by the appellant-assessee and dismiss the appeal by the Revenue." 8. By following our earlier order (supra), we set aside the impugned order and allow the appeal filed by the appellant. Appeal filed by the department is dismissed. (Dictated and pronounced in the open Court)