2004 (9) TMI 690 - AT - Central Excise

Summary

Issues Involved:
1. Marketability of pre-cast RCC box segments and slabs.
2. Eligibility for exemption under Notification No. 59/90-C.E.
3. Recalculation of duty demand.
4. Reduction in penalty.
5. Invocation of the longer period of limitation.

Detailed Analysis:

1. Marketability of Pre-Cast RCC Box Segments and Slabs:
The primary issue is whether the pre-cast box segments and slabs manufactured by the assessee are marketable commodities. The assessee contended that these items, fabricated as per specific designs for the Railways, are not known in the market as goods and are not bought or sold. They argued that these items lose their identity once fixed and glued together for specific minor bridges, thus failing the test of marketability. The Tribunal agreed, citing multiple judgments, including Moti Laminates Pvt. Ltd. v. CCE and Bhor Industries Ltd. v. CCE, which emphasized that goods must be known in common parlance or the commercial community for buying and selling to be considered marketable. The Tribunal concluded that the items in question are not goods for excise duty purposes as they are not capable of being bought and sold in the market.

2. Eligibility for Exemption under Notification No. 59/90-C.E.:
The assessee claimed that even if the goods were excisable, they would be eligible for exemption under Notification No. 59/90-C.E., which exempts goods manufactured at the site of construction for use at such site. The Tribunal noted that the goods were manufactured at the Railway site and used solely for the specified construction work, satisfying the conditions of the exemption notification. The Tribunal referred to the Board's Circular No. 456/22/99, which clarified that the term "site" should not be restrictively interpreted. Hence, the Tribunal held that the goods were eligible for exemption.

3. Recalculation of Duty Demand:
The Revenue appealed against the lower appellate authority's decision to recalculate the duty demand based on the actual quantity of steel supplied by the Railways (119.831 MT) instead of the quantity mentioned in the show cause notice (155.231 MT). The Tribunal upheld the lower appellate authority's decision, noting that the duty demand should be recalculated based on the correct quantity of materials used.

4. Reduction in Penalty:
The lower appellate authority had reduced the penalty from Rs. 25,000 to Rs. 10,000. The Revenue contested this reduction. However, the Tribunal found no reason to interfere with the lower appellate authority's decision, as the recalculated duty demand and the non-marketability of the goods justified the reduced penalty.

5. Invocation of the Longer Period of Limitation:
The assessee argued that the longer period of limitation under the proviso to Section 11A(1) of the CE Act, 1944, could not be invoked as there was no deliberate withholding of information. The Tribunal, having allowed the appeal on merits, found that the question of invoking the longer period of limitation did not survive for consideration.

Conclusion:
The Tribunal allowed the appeal filed by the assessee, holding that the pre-cast RCC box segments and slabs are not marketable and thus not excisable. The goods were also found eligible for exemption under Notification No. 59/90-C.E. Consequently, the recalculation of duty demand and the reduction in penalty were upheld. The appeal filed by the Revenue was dismissed.