2008 (9) TMI 824 - AT - Central Excise

Summary

Issues:
Confirmation of demand of excise duty on the appellant for manufacturing pre-cast cement blocks for construction of a jetty at Pipavav port.

Analysis:

The judgment revolves around the confirmation of a demand of Rs. 57.89 lakhs against the appellant for manufacturing pre-cast cement blocks during the construction of a jetty at Pipavav port. The adjudicating authority classified the cement blocks as excisable goods under Heading 68.07, attracting excise duty. The appellant raised several contentions, including the argument that the cement blocks were specifically made for the jetty construction and not marketable goods. Additionally, they contended that the manufacturing activity was conducted as a joint venture with another entity and that the activity was exempted under Notification No. 59/90-C.E.

The Commissioner did not address the appellant's contentions and confirmed the demand solely based on the manufacturing activity of the cement blocks. However, the Tribunal found that since the cement blocks were manufactured by a joint venture involving the appellant and another entity, the demand of duty on the appellant alone was unjustified. The Tribunal cited a decision by the Chennai Bench, emphasizing that any demand for excise duty should be raised on the joint venture entity, not on individual participants.

Based on the legal principle established in the Chennai Bench decision, the Tribunal concluded that the confirmation of duty demand on the appellant was illegal and unauthorized. Consequently, the impugned order was set aside, and both appeals were allowed in favor of the appellants. The judgment highlights the importance of considering the legal entity responsible for manufacturing activities in joint ventures when determining liability for excise duty.