2012 (8) TMI 690 - AT - Central Excise

Aluminium structurals - Manufacture - demand of excise duty- assessee was awarded the works for structural glazing/aluminium joinery - Held that - The entire process of fixing the glazing system is done by fixing the aluminium section on the brackets and by sticking the glass using silicon. For this reason, semi-unitized glazing system is internationally known as sticking glazing system. - the ratio of the Mahindra & Mahindra judgment 2005 (11) TMI 103 - CESTAT, NEW DELHI settled the dispute against the assessee. Period of limitation - appellant suppressed the fact of manufacture of aluminium structures in erecting the structural glazing system in the RMZ premises - demand is not barred by limitation Regarding quantification and extension of Cenvat Held that - Duty due should be quantified on the assessee producing the relevant documents and cenvat credit allowed in accordance with law - goods are liable to duty as manufactured goods - grant of benefit of cenvat credit on production of necessary documents

Issues Involved:
1. Whether the activities undertaken by the appellant amounted to "manufacture" under the Central Excise Act.
2. Classification of the goods under the appropriate tariff heading.
3. Whether the demand was time-barred.
4. Correctness of the quantification of duty liability.
5. Penal liability of the appellant.

Issue-wise Detailed Analysis:

1. Whether the activities undertaken by the appellant amounted to "manufacture":

The appellant, M/s. Alumayer India Pvt. Ltd. (AIPL), contended that their activities involving cutting, drilling, punching, and assembling aluminium sections and glass at the site did not amount to "manufacture" as defined under the Central Excise Act. They argued that no new commodity with a different name, character, and use emerged from these processes. The Tribunal, however, held that the processes undertaken by AIPL resulted in the creation of new, identifiable goods (aluminium structurals) that were distinct from the raw materials used. The Tribunal relied on the Larger Bench decision in Mahindra & Mahindra Ltd. v. CCE, which stated that converting raw materials like angles, tubes, and plates into distinct commodities amounted to manufacture.

2. Classification of the goods:

The Original Authority and the Commissioner (Appeals) classified the goods under Chapter Sub-Heading 76.10 of the Central Excise Tariff Act, which includes aluminium structures and parts of structures. The Tribunal upheld this classification, noting that the impugned goods were specifically covered by CSH 76.10, which includes items like doors, windows, and their frames, balustrades, pillars, and columns.

3. Whether the demand was time-barred:

The appellant argued that the demand was time-barred, citing that the Mahindra & Mahindra decision, which clarified the legal position, was rendered in November 2005. They claimed a bona fide belief that their activities did not amount to manufacture based on earlier conflicting decisions. The Tribunal rejected this argument, stating that the appellant suppressed the fact of manufacture and that the demand was not barred by limitation. The Tribunal also referenced the Gujarat High Court decision in CCE, Surat v. Neminath Fabrics Pvt. Ltd., which held that the Department's knowledge of the activities did not prevent issuing a show-cause notice beyond one year if the conditions for invoking the extended period were met.

4. Correctness of the quantification of duty liability:

The appellant disputed the quantification of duty, arguing that the value of bought-out items and various charges (design, engineering, erection, commissioning, and labor) should be excluded from the contract price to arrive at the assessable value. The Tribunal directed that the duty due should be quantified based on the appellant producing relevant documents and allowed the benefit of Cenvat credit in accordance with the law.

5. Penal liability of the appellant:

The Tribunal held that the penal liability of the appellant should be redetermined based on the final quantification of duty and the grant of Cenvat credit. The matter was remanded for this purpose, and the appellant was to be given an adequate opportunity to present their case before the duty due was decided.

Conclusion:

The Tribunal held that the activities undertaken by AIPL amounted to manufacture, the goods were correctly classified under CSH 76.10, and the demand was not time-barred. The quantification of duty and the grant of Cenvat credit were to be redetermined, and the penal liability was to be reassessed accordingly. The appeal was otherwise rejected.

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