2004 (4) TMI 366 - AT - Central Excise

Summary

Issues:
Excisability of fabricated parts for construction projects

Analysis:
The appellant, an engineering procurement and construction company, fabricated shells for exhaust and bypass stacks for a gas power project. The Commissioner of Central Excise held that the shells were marketable and subject to Central Excise levy as they were distinct from steel plates and satisfied the condition of marketability. The appellant argued that they did not manufacture goods but only carried out fabrication work for civil construction, citing precedents where fabrication for civil construction did not result in marketable goods. The Tribunal considered the distinction between intermediate parts and final products, emphasizing that excisable goods must be marketable or capable of being marketable. They followed Supreme Court dictum and held that the fabricated shells were not liable for excise duty.

The High Court analyzed the excisability of fabricated parts for engineering works, noting that the parts were tailored to specific customer projects and not offered for sale in the market. Citing previous judgments, the High Court concluded that fabricated parts for engineering works did not meet the criterion of marketability. Similarly, the Tribunal in another case found that fabrication activities for structures did not result in marketable goods. The Tribunal in the present case observed that the fabricated shells were made according to specific engineering designs for construction purposes and lacked commercial identity for buying and selling. They determined that the shells were not marketable goods and therefore not excisable. The Tribunal ruled in favor of the appellant, allowing the appeal with any consequential relief.

In conclusion, the judgment focused on the excisability of fabricated parts for construction projects, emphasizing the requirement of marketability for goods to be subject to Central Excise levy. The Tribunal and the High Court examined precedents and held that fabricated parts tailored for specific projects and lacking commercial identity were not marketable goods. The appellant's activity of fabricating shells for construction purposes was deemed non-excisable based on these findings.