1983 (8) TMI 287 - AT - Central Excise

Summary

Issues:
1. Whether the Dal Mill attached to earth is dutiable under Item 68 of the Central Excise Tariff.
2. Whether the Dal Mill, not removed from the factory premises, is liable for Central Excise duty.
3. Whether the Central Excise duty, if applicable, should be levied on the value of job-work.
4. Whether the penalty imposed on the appellants was justified.

Analysis:

1. The case involved the question of whether a Dal Mill attached to earth should be charged to duty under Item 68 of the Central Excise Tariff. The appellants argued that the Dal Mill, being attached to earth, should not be considered as "goods" and hence not subjected to Central Excise duty. They cited legal precedents and government orders to support their argument. The Tribunal considered the arguments and the evidence presented, including photographs of the Dal Mill, and concluded that the plant in question, firmly attached to the earth, could not be described as 'goods' attracting Central Excise duty. The Tribunal held that such plant and machinery assembled on-site from parts purchased from the market cannot be considered excisable goods.

2. The appellants further argued that the Dal Mill, not removed from the factory premises, should not be liable for Central Excise duty. They contended that the plant had not been consumed or utilized within the factory premises. The Tribunal considered this argument but based its decision on the plant being firmly attached to the earth, making it part of the immovable property. As such, the Tribunal held that the plant could not be subjected to excise duty, regardless of whether it was removed or utilized within the factory premises.

3. Additionally, the appellants argued that if any Central Excise duty was applicable, it should be levied only on the value of the job-work done. They claimed that the plant had been assembled by independent contractors through job-work. The Tribunal considered this argument but ultimately based its decision on the plant being attached to the earth and not meeting the criteria of excisable goods. Therefore, the Tribunal did not delve into the specifics of job-work valuation for Central Excise duty purposes.

4. Lastly, the appellants contested the imposition of a penalty, claiming they had informed the Central Excise Department about the plant's erection and had not violated any rules. The Tribunal, having found in favor of the appellants on the main issue of excisability, held that there had been no violation of rules warranting a penalty. The Tribunal allowed the appeal, setting aside the Adjudication Order of the Collector and ruling in favor of the appellants.