CA Bimal Jain
Facts:
Alcatel India Ltd. (“the Respondent”) was engaged in the manufacture of Digital Switching Systems and parts thereof. The Respondent cleared certain bought out items such as Printer, PC Workstations, Modem, Cable Lines, Power Plant, Battery etc. (“the bought out item”) to their customers, as accessories to main equipment, without payment of Excise duty under the cover of non-excisable invoices, and accordingly, the Respondent was not availing corresponding Cenvat credit on the bought out items. The Department alleged that Excise duty is payable on the bought out items as the bought out items, which were received by the Respondent are essential parts of the finished goods.
Period involved: April 1, 1998 to May 31, 2000
Held:
The Hon’ble CESTAT, New Delhi relying upon the judgment of Hon’ble Gujarat High Court in the case of CCE, Vadodara-II Vs. Indeos ABS Ltd. [2010 (254) ELT 628 (Guj.)], which was further upheld by Hon’ble Supreme Court in [2011 (3) TMI 1575 – SUPREME COURT], decided the matter on the ground of revenue neutrality by observing that the Respondent had not availed Cenvat credit on the bought out items and thus the value of bought out items were not to be included in the assessable value. Hence, the demand of duty by the Revenue would not be sustainable as the entire exercise is revenue neutral.
(Author can be reached at Email: bimaljain@hotmail.com)
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