2015 (5) TMI 1009 - AT - Central Excise

Duty demand on fabricated structures for installation of plant and machinery - as per revenue the fabricated items cannot be classifiable under sub-heading No. 89.01 of the Schedule to the Central Excise Tariff Act, 1985 - assessee opposed the demand as that the goods are not marketable and hence not excisable - Held that - The onus lies with the Revenue in respect of the marketability of the product. It has also observed that the marketability cannot be established on the basis of mere sale of goods. It requires sufficiently proved that the product is commercially known. The learned Authorised Representative relied the decision of Hon ble Supreme Court in the case of A.P. Electricity Board (1994 (2) TMI 56 - SUPREME COURT OF INDIA ) wherein held that the marketability of the article does not depend upon the number of purchasers nor is the market confined to territorial limits of the country. In the present case, we do not find any material that the structures constructed by the appellant for the purpose of construction of the jetty is commercially known as similar to pontoons in any market. In view of the above discussion, we find that the demand of duty along with interest and penalty cannot be sustained. - Decided in favour of assessee

Summary

Issues:
Demand of duty on fabricated items under sub-heading No. 89.01 and marketability of temporary structures for construction of jetty.

Analysis:
1. The case involved a dispute regarding the demand of Central Excise duty on fabricated structures and floating structures used as construction aids. The appellants contested the demand on the grounds that the fabricated items were not classifiable under sub-heading No. 89.01 and that the temporary structures were not marketable.

2. The appellant's advocate argued that the fabricated items did not fall under the specified sub-heading of the Central Excise Tariff Act, 1985. Additionally, they claimed that the Revenue failed to prove the marketability of the temporary structures used in the construction of the jetty. The advocate relied on various case laws to support their arguments and contended that the demand was time-barred.

3. The Revenue's representative countered by asserting that the temporary floating structures were essential for supporting the construction of the jetty and fell under sub-heading No. 89.07. They argued that marketability does not solely depend on the actual selling of goods, citing legal precedents to support their position. The Revenue claimed that the appellants did not provide sufficient evidence to prove that the goods were not marketable.

4. Upon reviewing the facts and arguments presented, the Tribunal found that the temporary structures were constructed for the specific purpose of building the jetty, using materials supplied by another company. The Tribunal referenced Chapter Heading 89.07 of the Central Excise Tariff Act, which covers various floating structures, including pontoons used for construction support.

5. The Tribunal noted that the appellants did not dispute constructing the temporary structures for the jetty but contested the marketability of the goods. The adjudicating authority's decision was based on the concept that marketability is determined by the product's capability to be marketed or sold, irrespective of actual sales. Legal references were made to support this interpretation.

6. Citing relevant legal judgments, including decisions by the Hon'ble Supreme Court, the Tribunal emphasized that the burden of proving marketability lies with the Revenue. The Tribunal highlighted that marketability is not solely based on hypothetical sales but requires concrete evidence of commercial recognition in the market.

7. Ultimately, the Tribunal concluded that the Revenue failed to establish the marketability of the temporary structures used by the appellants in the construction of the jetty. As a result, the demand of duty, along with interest and penalty, was deemed unsustainable. The Tribunal set aside the impugned order and allowed the appeal filed by the appellant.

This detailed analysis of the legal judgment addresses the issues raised regarding the demand of duty on fabricated items and the marketability of temporary structures, providing a comprehensive overview of the arguments presented and the Tribunal's decision.