2003 (1) TMI 446 - AT - Central Excise

Summary

Issues Involved:
1. Whether the erection of an induction/arc furnace at the customer's site is liable to excise duty.
2. Whether the activity undertaken by the appellants results in the emergence of a new excisable commodity.
3. Whether the item in question is considered movable and saleable.
4. Applicability of the Supreme Court and Tribunal decisions on similar matters.
5. Eligibility for exemption under Notification No. 67/95-C.E., dated 16-3-95.
6. Justification of the Department in invoking the larger period for demand.

Issue-wise Detailed Analysis:

1. Liability of Erection to Excise Duty:
The primary issue is whether the erection of an induction/arc furnace at the customer's site is subject to excise duty. The appellants argued that the activity of assembling and commissioning the furnace at the site does not result in the creation of a new excisable commodity. The Department, however, contended that the process results in a new commodity, making it liable for excise duty.

2. Emergence of a New Commodity:
The appellants described the detailed process of assembling the furnace at the site, which includes constructing a civil platform, placing and aligning various components, and interconnecting them. The Department's stance was that this process results in the emergence of a new commodity, an induction/arc furnace, which is excisable.

3. Movability and Saleability:
The Department argued that the furnace, once assembled, is movable and saleable, as it can be dismantled and reassembled at another site. They referenced the statement of the appellants' Manager (After Sales Services) to support this claim. The appellants countered this by citing Supreme Court decisions which state that goods must be marketable in their assembled form to be considered excisable.

4. Applicability of Supreme Court and Tribunal Decisions:
The appellants relied on several Supreme Court and Tribunal decisions, such as Triveni Engineering & Industries Ltd. v. CCE and CCE, Nagpur v. Wainganga Sahakari S. Karkhana Ltd., which held that items assembled at the site and attached to the earth are not excisable. The Department referenced the Sirpur Paper Mills Ltd. decision to argue that the furnace is movable and excisable, but the appellants distinguished this case based on the specific facts and the Supreme Court's subsequent clarification in Triveni Engineering.

5. Exemption under Notification No. 67/95-C.E.:
The appellants alternatively argued that even if the furnace is considered excisable, they are entitled to the benefit of exemption under Notification No. 67/95-C.E., dated 16-3-95. The Department conceded that the appellants are eligible for this exemption for the disputed period.

6. Invocation of Larger Period:
The appellants also argued that the Department was not justified in invoking the larger period for the demand. However, since the appellants succeeded on the issue of exemption, this point was not further elaborated upon.

Conclusion:
After careful consideration of the submissions and perusal of the records, the Tribunal found that the disputed period is covered under Notification No. 67/95-C.E., dated 16-3-95, and thus the appellants are entitled to the benefit of exemption. Consequently, the appeal was allowed, and the need to address other issues raised by both sides was obviated.