2003 (8) TMI 262 - AT - Central Excise

Summary

Issues:
1. Demand of duty on various structural items fabricated at the site of the factory.
2. Classification of goods under specific sub-headings for duty purposes.
3. Applicability of Notification No. 61/90-C.E. for duty exemption.
4. Interpretation of Board's Circular No. 456/22/99-CX.
5. Whether the structural items are excisable goods capable of being marketed.

Issue 1: Demand of duty on various structural items fabricated at the site of the factory
The case involved the demand of duty on structural items fabricated at the factory site by contractors for setting up a cement manufacturing plant. Show-cause notices were issued seeking recovery of a substantial duty demand. The Commissioner confirmed the duty demand, stating that the items were classifiable under specific headings and were capable of being dismantled and moved to other places, making them excisable goods.

Issue 2: Classification of goods under specific sub-headings for duty purposes
The dispute revolved around the classification of various structural items like platforms, supports, sheds, ladders, etc., under sub-headings No. 7308.90 and 8485.90. The Commissioner held that these goods fell under specific headings, making them liable for duty payment.

Issue 3: Applicability of Notification No. 61/90-C.E. for duty exemption
The appellants argued that the demand of duty on the items was not sustainable as they were immovable goods, incapable of being marketed. They claimed entitlement to the benefit of Notification No. 61/90-C.E. for goods under a specific heading. The Commissioner denied this benefit, stating that the goods were capable of being marketed and were not proven to be manufactured by the contractors.

Issue 4: Interpretation of Board's Circular No. 456/22/99-CX
During the hearing, the appellants referred to a circular clarifying the scope of goods manufactured at a construction site for use in construction work. The circular highlighted exemptions under specific notifications related to goods manufactured at the site. The Tribunal noted that the circular was not considered by the Commissioner in the impugned order, indicating a lack of examination of relevant provisions.

Issue 5: Whether the structural items are excisable goods capable of being marketed
The Tribunal analyzed whether the structural items, once erected at the site, could be considered excisable goods capable of being marketed. The appellants argued that the items, if dismantled, would turn into waste and lose their utility elsewhere due to alignment and engineering precision issues. Citing a Supreme Court decision, the Tribunal held that such items embedded in earth and forming part of immovable property were not excisable goods subject to duty.

In conclusion, the Tribunal allowed the appeal, setting aside the Commissioner's order confirming the duty demand on the structural items. The decision was based on the immovability of the items, their inability to be marketed as excisable goods, and the lack of evidence supporting duty liability. The Tribunal also highlighted the relevance of specific notifications and circulars in determining duty exemptions and classifications.