2006 (12) TMI 251 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are whether oil storage tanks and chimneys are excisable goods, whether the assessee can be considered a manufacturer, and whether the demand is time-barred.

Oil Storage Tanks and Chimneys - Excisability:
The Commissioner (Appeals) granted benefit to the respondents by holding that the oil storage tanks and chimneys cannot be considered excisable goods as they came into existence while being embedded to the earth. This decision was based on the Supreme Court ruling in the case of Triveni Engineering and Industries Ltd. The Appellate authority also noted that the goods were fabricated by a sub-contractor and held that the demand was time-barred. Reference was made to a Board Circular to support the finding that tanks made of metal for storing petroleum products are not movable and hence not excisable. The Tribunal agreed with the Commissioner (Appeals) on this issue.

Assessee as Manufacturer:
The Revenue contended that since the tanks were first manufactured separately by the respondent and then taken to the installation site, they should be considered excisable. However, after examining the process adopted by the fabricator and contractor, it was found that the tanks came into existence by being embedded to the earth, making them immovable and not marketable. The Tribunal concurred with the Commissioner (Appeals) on this aspect, ruling that the tanks and chimneys were not excisable goods.

Manufacturer Criteria:
The Revenue acknowledged that the respondents had placed contracts for the erection of the tanks and chimneys but argued that since the raw material was supplied by the assessee and guidance was provided, they should be considered the manufacturer. However, the Tribunal held that merely supplying raw materials and giving technical guidance does not qualify one as a manufacturer. Therefore, the Revenue's appeal lacked merit on this point.

Limitation of Demand:
The Commissioner (Appeals) had ruled that the demand was time-barred, a decision that the Revenue did not challenge in their appeal memorandum. Consequently, the Tribunal upheld the order on this issue.

In conclusion, the Tribunal rejected the appeal filed by the Revenue based on the findings related to the excisability of oil storage tanks and chimneys, the assessee's status as a manufacturer, and the limitation of the demand.