2001 (11) TMI 797 - AT - Central Excise

Issues Involved:
1. Whether the Fluid Bed Tea Driers (FBDs) are excisable goods.
2. Whether the plenum chamber being recessed underground affects the excisability of FBDs.
3. Whether the FBDs become immovable property upon installation.
4. Whether the extended period for demand under Section 11A of Central Excise and Salt Act 1944 is applicable.
5. Whether the penalty imposed is justified.

Issue-Wise Detailed Analysis:

1. Excisability of Fluid Bed Tea Driers (FBDs):
The Tribunal examined whether FBDs, as manufactured and cleared by the appellants, are excisable goods. It was noted that the appellants manufactured and supplied FBDs, which were inspected and tested before dispatch. The Tribunal observed that the FBDs came into existence as complete machines before being dispatched in a disassembled form for ease of transportation. The Commissioner concluded that FBDs are movable goods and thus excisable under Tariff Item 68 of the Central Excise Tariff. The Tribunal upheld this view, finding that the FBDs were indeed excisable goods.

2. Plenum Chamber and Excisability:
The appellants argued that the FBDs required a plenum chamber recessed underground, making them special machines and non-excisable. The Tribunal noted that the Commissioner had examined this aspect and found that the plenum chamber need not necessarily be underground and could be kept above floor level. The Commissioner concluded that the FBDs were movable and not fixed to the ground, thus retaining their character as goods. The Tribunal agreed with this finding, noting that the appellants failed to substantiate their claim that the plenum chamber being recessed underground affected the excisability of the FBDs.

3. FBDs as Immovable Property:
The appellants contended that the FBDs became immovable property upon installation, similar to lifts in buildings. The Tribunal referred to the Supreme Court's decision in Narne Tulaman Manufacturers Pvt. Ltd., which held that assembly of components at site amounts to manufacture. The Tribunal found that the FBDs were tested and came into existence as complete machines before being dispatched. Therefore, the FBDs did not become immovable property upon installation and remained excisable goods.

4. Extended Period for Demand:
The appellants argued that the demand was barred by the limitation period of six months under Section 11A(1) and that the extended period was not applicable. The Tribunal noted that the Commissioner had confirmed the demand for the extended period, citing suppression of actual production and clearance of goods without proper accounting and payment of duty. The Tribunal upheld the Commissioner's finding, concluding that the extended period for demand was applicable due to the appellants' actions.

5. Justification of Penalty:
The appellants challenged the penalty of Rs. 20,000/- imposed under Rule 173(Q)(1), arguing it was arbitrary and excessive. The Tribunal found that the penalty was justified given the appellants' contravention of Central Excise Rules by manufacturing and clearing excisable goods without proper documentation and payment of duty. The Tribunal upheld the penalty imposed by the Commissioner.

Conclusion:
The Tribunal rejected the appeal, affirming the excisability of FBDs under Tariff Item 68, the applicability of the extended period for demand, and the justification of the penalty imposed. The Tribunal concluded that the FBDs were movable goods and did not become immovable property upon installation, thus retaining their character as excisable goods.

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