2008 (12) TMI 553 - AT - Central Excise

Railway line sleeper slabs - exemption under N/N. 6/2000 dated 1-3-2000 - Held that - just because the goods were manufactured near one bridge and supplied for use in the other bridges which are part of the same railway line does not disentitle appellants for exemption - The only requirement is that the goods must have been manufactured at the site for use. Once this condition is fulfilled, the appellants are eligible for the exemption - appeal allowed.

Summary

Issues:
1. Duty demand and penalty imposition for manufacturing slabs without required registration and discharge of duty.
2. Denial of exemption under Notification No. 6/2000 for goods manufactured near one bridge but used in several bridges along the railway line and supplied to other contractors.

Issue 1: Duty Demand and Penalty Imposition
The appellants were contracted by the Western Railway to cast prestressed railway line Sleeper Slabs for a specific project. However, the Revenue alleged that the slabs were manufactured without the necessary registration and duty discharge. Consequently, a duty of Rs. 33,15,265/- along with interest was demanded, and an equal amount of penalty was imposed. Additionally, the PSC slabs and articles were confiscated, with an option for redemption upon payment of Rs. 5 lakhs.

Issue 2: Denial of Exemption under Notification No. 6/2000
The appellants contended that they were eligible for exemption under Notification No. 6/2000, which exempts goods manufactured at the construction site for use in the construction work at that site. The denial of exemption was primarily based on the argument that the goods were manufactured near one bridge but used in various bridges along the railway line, including supply to other contractors. The advocate for the appellants cited precedents to support the interpretation that the term "manufactured at the site of construction" should be construed liberally. Notably, decisions in Jaypee Bella Cement v. CCE, Raipur, UP State Bridge Corporation Ltd. v. CCE, Chandigarh-II, and Simplex Concrete Piles (India) Ltd. v. CCE, Rajkot were referenced to bolster the argument for exemption eligibility.

Upon review, the Tribunal found that the mere fact that the goods were manufactured near one bridge but used in other bridges on the same railway line did not disqualify the appellants from claiming the exemption. Furthermore, regarding the Revenue's contention that the goods were supplied to other contractors, it was clarified that the Notification did not impose such a restriction. The crucial condition for eligibility was that the goods must have been manufactured at the site for use, which, once met, entitled the appellants to the exemption. Consequently, the appeal filed by the appellants was allowed, overturning the earlier order.

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