2005 (7) TMI 507 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff, Manufacturer status of the appellants, Eligibility for Small Scale Industry (SSI) exemption.

Classification of goods under Central Excise Tariff:
The appeals arose from an Order-in-Original confirming demands on fully fabricated insulated tanks and semi-finished insulated tanks. The Commissioner had examined whether the appellants were manufacturers and whether the goods were immovable property. The Commissioner held that the appellants were manufacturers as they got work done partially from contractors. The tanks were considered part of cooling units and storage/pressure equipment under chapter sub-heading 8418 of Central Excise Tariff. The appellants argued that they were only supplying raw materials and should not be considered manufacturers. They contended that the goods should be classified under chapter sub-heading 8419.00 and be eligible for SSI Notification No. 175/86-C.E. The Tribunal found that the Commissioner's classification under 8418.00 was incorrect and ruled in favor of classifying the goods under 8419.00 based on a previous case. As all clearances were within the exemption limit, the appellants were deemed eligible for SSI exemption, leading to the appeals being allowed with consequential relief.

Manufacturer status of the appellants:
The Commissioner's findings that the appellants were manufacturers were upheld by the Tribunal. The appellants had hired labor contractors for partial work, and the relationship was not on a principal-to-principal basis. The contractors received labor charges, and various work was done at separate places before the appellants supplied the items to customers nationwide. The Tribunal agreed with the appellants' contention that the goods were parts of ice-cream and ice candy machines, classifiable under heading 84.19 of the Central Excise Tariff. The Tribunal's analysis supported the appellants' claim that they were eligible for SSI exemption due to clearances within the exemption limit, ultimately leading to the appeals being allowed with consequential relief.

Eligibility for Small Scale Industry (SSI) exemption:
The appellants' eligibility for SSI exemption was a key issue in the appeals. The Tribunal found that the goods should be classified under chapter sub-heading 8419.00 of the Central Excise Tariff based on a previous ruling. As all clearances were within the exemption limit, the appellants were deemed eligible for the benefit of the SSI exemption. This finding led to the appeals being allowed with consequential relief, setting aside the demands, penalties, and fines imposed.