ORDER
Gowri Shankar, Member (T)
1. The appeal by the Commissioner is against the order of the Commissioner (Appeals) holding that cost of shuttering that was manufactured at the behest of the respondent and supplied to Hindustan Construction Corporation Ltd. is not to be included in the telescopic travelling tunnel frame that it undertook and manufactured for Hindustan Construction Corporation Ltd.
2. Neither side was unable to tell us exactly what the nature of the finished goods was or what were the bought out items which were in dispute. The documents that we have seen, right from the show cause notice till the appeal filed before us are silent on this aspect and the Departmental Representative therefore expresses helplessness. Counsel for the respondent made some ineffectual attempt to tell us what the goods were but finally professed ignorance. The show cause notice only alleges failure to determine correct duty and paid and does not indicate any facts. In the reply filed by the assessee to this notice, it had explained the facts. These were that it had been asked by Hindustan Construction Corporation Ltd., the sister concern of Walchand group to manufacture tunnel shuttering. In the absence by it of the facilities required for this job, it asked another sister concern Ravalgaon Sugar Farm to perform this job and since it was running short of raw material, and substantial raw material was given by it to Ravalgaon Sugar Farm under Rule 57F(2) for manufacture. Since about 7 tonnes of material could not be supplied by it, it asked Ravalgaon to procure the material. The duty has been paid by Ravalgaon and hence no duty is payable. It is based upon this notice and the reply that the Asstt. Commissioner has held that the question is inclusion of bought out items in the finished products. The Asstt. Commissioner has, applied the ratio of decision of Supreme Court in Name
Tulaman Manufacturers Pvt. Ltd. v. CCE – 1988 (38) E.L.T. 566 confirmed the demand. On appeal from this order, the Commissioner (Appeals) concluded that cost of bought out items is required to be added to the assessable value of the product the product is incomplete without the bought out items and relying upon the Tribunal decision in National Radio & Electronics Co. Ltd. v. CCE -1995 (76) E.L.T. 436 held the value not includible.
3. As we have noted, nobody is clear as to what the bought out items were which were used in the manufacture of finished goods. It is not possible for us to comprehend how the Commissioner (Appeals) has concluded that the cost of the bought out items was not required to be included in the finished product. We have to repeat the complete lack of clarity on this fact. In this view, we are of the view that the Commissioner (Appeals) should apply his mind to the facts of the case and pass a reasoned order on the facts and issues before him.
4. We allow the appeal and set aside the impugned order. The Commissioner shall dispose of the appeal in accordance with law.