V.K. Ashtana, Member (T) - (1.) IN these appeals the appellant company as well as now late Managing Director Sri Hanumantha Rao have filed separate appeals, but since the matter involves a common issue, it is being considered together. The appellants have moved one Miscellaneous application for impleading the Legal Heirs of the late Managing Director as parties to this appeal.
(2.) ON a careful consideration of the submissions, we find that the business of the appellant company is now being run by the legal heirs and therefore, their request is allowed.
(3.) BRIEFLY , the show -cause notice dated 7.3.94 charges the appellants on number of issues. The appellants were manufacturing the following items: - (a) Telephone Call Monitor with or without printers and/or batteries; (b) Money Mate telephones which were used only for STD calls in Public booths; (c) Money Box telephones which were used in Public booths for only local calls; and (d) Cash registers. The notice alleged that the appellants had cleared telephone call monitors fitted with printers and/or batteries, but from April, 1991 onwards, they had misdeclared the same as call monitors without printers etc. It is also alleged that the stock of the printer/battery and certain other accessories were recovered from the buyer of the monitor under separate invoices. In this statement dated 27.12.93 late Sri Hanumantha Rao, then Managing Director had admitted the collection of the extra amount built in the supplementary invoices under the accessories head as representing the warranty maintenance charges retained by the dealers for providing one year free warranty on behalf of the company. The notice further alleges that this is not a trade discount and the same would be includable in the assessable value, which has not been done. Heard learned advocate for the appellants, who submits that the charges with respect to telephone call monitors can therefore be summarised into two counts namely under valuation and clandestine removal. Out of the total demands of Rs. 44,42,678 an amount of Rs. 35,84,482 is concerned with the value of what is claimed as accessories namely printers and batteries. He submits that both printers and batteries are accessories as the call monitors can fully functional without either of them. The printer is necessary only when a customer asked for a bill which they do in practice the battery is only a back up and enables the call monitor to continue its operations even when the main power is not available. The optimum duration for which the battery remains functional was submitted before us as 20 hours. The learned advocate submits that since the call monitor as an enunciator panel of LCD, therefore, the amount to be paid by the customer for his call as displayed therein and hence the printer is only performing an optional role of printing at the same charges. Similarly as far as the battery back up is concerned, since the call monitor accepts power from the mains, which is fed into the machine through built -in transformer, therefore, as long as such power is available the battery back up is not essential to the function of the monitor. He submits that certain customers infact, prefer to use the UPS with back up externally for this purpose. On this aspect he cites a number of decisions to his contention that such bought out items being optional in the nature are not to be included in the assessable value as follows: - ORG Systems as PSI DATA Systems - -as Sundry Computers (P) Ltd., CCE v. Kishore Pumps 1997 (91) ELT 91 Ashok Leyland, 1997 (73) ECR130 CCE v. Friction Materials . CMS Computers, Wipro Information Technology, Sriram Bearings, 1997 (91) ELT 255 (SC) In particular, he submits that in the case of Sriram Bearings (supra), it has even been considered that if the said accessory is fitted in the cabinet of the main item i.e., it is built -in even then it does not cease to function as an accessory and hence being bought out its assessable value would not be included. The submits that both the printer as well as battery though fit inside the main cable would be covered squarely by the ratio of the said decision. ;