2018 (1) TMI 1469 - AT - Central Excise

Excisablity - fabricated items - erection of sheds or erected structures classifiable under chapter sub-heading 7308.90 and liable for duty - Held that - In the impugned order it nowhere has been shown that the job workers or contractors were hired labour, as contemplated under Section 2(f) of the Central Excise Act - though the revenue has placed reliance upon decision of Mahindra & Mahindra 2005 (11) TMI 103 - CESTAT, NEW DELHI but in the present case it is nowhere appearing that the goods in questions were first fabricated and then attached to the earth. Further if the goods are attached to the earth are not capable of being moved are immovable property, it cannot be made liable for duty. It is a fit case to remand the case back to the adjudicating authority to decide the case afresh - appeal allowed by way of remand.

Summary

Issues:
Manufacture of excisable goods, liability for duty, determination of manufacturer, job worker classification, duty on immovable property, suppression of facts, limitation period.

Manufacture of excisable goods and liability for duty:
The Appellant's factory premises were visited, and it was found that they were engaged in manufacturing building structurals and accessories. The Appellant was issued a show cause notice alleging that the fabricated items were excisable and liable for duty under specific sub-headings. The demands were confirmed, and penalties were imposed. The adjudicating authority confirmed the demand based on the manufacturing activity taking place inside the factory premises. However, it was not clear from the order who the actual manufacturer of the goods was, whether it was the Appellant or the job worker. It was emphasized that the supplier of raw material is not considered the manufacturer; rather, the person undertaking the manufacturing is liable for duty. The Tribunal cited relevant case laws to support this principle.

Job worker classification and duty on immovable property:
The Tribunal noted that the impugned order did not establish whether the job workers or contractors were considered hired labor, as required by the Central Excise Act. It was crucial to determine if the goods were first fabricated and then attached to the earth, as immovable property not capable of being moved cannot be made liable for duty. The Tribunal highlighted the importance of clarifying these points and remanded the case back to the adjudicating authority for a fresh decision after addressing these issues.

Suppression of facts and limitation period:
The Tribunal observed that the adjudicating authority did not properly examine whether there was a suppression of facts or consider the issue of limitation. It was emphasized that these aspects needed to be thoroughly assessed. Therefore, the impugned order was set aside, and the matter was remanded to the original authority for a fresh decision after verifying the facts and ensuring compliance with legal principles on all the identified issues.

In conclusion, the appeal was allowed by way of remand to the original authority for a comprehensive reevaluation based on the Tribunal's observations and directions.