2003 (10) TMI 557 - AT - Central Excise

Summary

Issues: Whether pipes and fittings of various specifications are liable to Excise duty and whether the benefit of Notification No. 67/95-C.E. is available.

Analysis:
1. Issue 1 - Liability to Excise Duty:
The appellant argued that the pipes and fittings fabricated by them are not goods for the purpose of levying Central Excise duty as they are not movable and cannot be brought to the market for sale or purchase. They relied on a circular stating that pipes embedded into earth are not chargeable to Excise duty. However, the respondent contended that the manufacturing activity undertaken by the appellant results in the production of excisable goods known as pipes in the common trade parlance. The respondent emphasized that the pipes had come into existence before being laid in trenches and are therefore movable and liable to excise duty.

2. Issue 2 - Benefit of Notification No. 67/95-C.E.:
The appellant claimed the benefit of exemption under Notification No. 67/95-C.E., which exempts capital goods manufactured in a factory and used within the factory of production. They argued that the fabricated pipes qualify as capital goods and are used within the factory of production. The respondent, however, contended that the appellant did not use the pipes captively, rendering them ineligible for the notification's benefit.

3. Judgment:
The Tribunal focused on the availability of the benefit of Notification No. 67/95-C.E. without delving into the movability of the fabricated pipes. Noting that the pipes were fabricated in the factory premises and used within the factory of production, the Tribunal held that the benefit of the notification is applicable. Citing a previous case, the Tribunal emphasized that the requirement for the notification is not that the capital goods have to be used by the same customer in their factory. Consequently, the Tribunal allowed the benefit of the notification to the pipes and fittings in question, exempting them from duty and concluding that no penalty is imposable on the appellants. As a result, all the appeals were allowed.