2012 (12) TMI 583 - AT - Central Excise

Non obtaining Central Excise registration - whether the fabrication of miter bends, reducers of iron & steel from the duty paid pipes would amount to manufacture? - Held that - Appellant had been awarded a contract of water supply project of supply of water to Amerli district consisting the work of fabrication, supply, laying and jointing water transmission main from Botad in Bhavnagar district in Chavda in Amreli district on turn key basis with all civil, mechanical and instrumentation work by Government of Gujarat vide letter dated 24.09.99 - for execution of such project, appellant was given a site wherein appellant procured duty paid pipes and used the same for execution of pipe line project and the said miter bends, reducers of iron & steel were fabricated from duty paid pipes at their work shop situated at the site at Botad. Demand on the appellant on these miter bends and reducers confirmed only on the ground that it was done so at their work shop and removed from work shop to the site for further use in the laying of pipe line for water project but this stand of the lower authorities seems to be incorrect, as the address as well as the show cause notice specifically talks about the reducers and the bends being fabricated at their site at Botad. Thus the fabrication of these items at site for the use at site is not liable for duty as has been held in the case of DODSAL PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BANGALORE 2005 (10) TMI 118 - CESTAT, MUMBAI - in favour of the appellant.

Summary

Issues:
1. Whether the fabrication of miter bends and reducers of iron & steel from duty paid pipes amounts to manufacture and attracts Central Excise duty liability.

Analysis:

1. The appellant was engaged in manufacturing excisable goods without obtaining Central Excise registration. They manufactured and cleared miter bends of iron & steel at their site for captive consumption. The value of the goods was determined as per Central Excise Valuation Rules, and duty was demanded along with interest and penalties. The lower authorities confirmed the demand, leading to the appeal.

2. The appellant argued that the miter bends were manufactured at the site's workshop for a government-approved water supply project. They contended that the lower authorities erred in concluding that the goods were not manufactured at the site. Citing relevant case law, the appellant claimed that bending duty paid goods at the site does not constitute manufacturing liable for duty.

3. The Department argued that the bends and reducers were manufactured at the workshop for captive consumption, falling under a specific chapter heading, requiring Central Excise registration and duty payment.

4. The Tribunal analyzed the facts and the show cause notice, which specified the site of fabrication. They noted that the goods were fabricated at the site for use at the site, aligning with precedents where such activities were not considered manufacturing liable for duty. Relying on previous judgments, the Tribunal held in favor of the appellant, setting aside the lower authorities' decision and allowing the appeal.