2008 (4) TMI 111 - AT - Central Excise

Whether aluminium curtain wall structural glazing system which was made at the buyer s site out of duty-paid unitized aluminium frames (brought from the assessee s factory), duty-paid glass sheets (imported and supplied by the buyer) & other materials like sealant, tissue paper, glass wool etc., was exigible to duty impugned item can t be treated as immovable property, so they are exigible to duty - lower appellate authority is directed to consider the assessee s plea of limitation

Summary

Issues:
1. Whether the "aluminium curtain wall structural glazing system" assembled at the buyer's site out of duty-paid materials is exigible to excise duty.
2. Whether the lower appellate authority adequately examined the time-bar issue regarding the demand of duty on the glazing system.

Issue 1 - Excisability of Glazing System:
The case involved a dispute over the excisability of the "aluminium curtain wall structural glazing system" assembled at the buyer's site. The department appealed against the Commissioner (Appeals) setting aside a duty demand and penalties imposed on the assessee. The question was whether the assembled product, made from duty-paid materials including aluminium frames, glass sheets, and other accessories, was subject to excise duty. The adjudicating authority held that the assembly process constituted "manufacture" attracting excise duty. However, the first appellate authority opined that since the assembled product became part of an immovable property, it was not excisable. The Tribunal disagreed, emphasizing that the assembled glazing system was a distinct manufactured product with commercial identity, different from its components. The Tribunal cited precedents to support the view that assembly processes resulting in marketable products are considered manufacture under the Central Excise Act. Ultimately, the Tribunal held that the glazing system was excisable, overturning the lower appellate authority's decision.

Issue 2 - Examination of Time-Bar Issue:
While ruling in favor of the Revenue on the excisability issue, the Tribunal noted that the lower appellate authority failed to address the time-bar issue raised by the assessee regarding the demand of duty on the glazing system. The assessee argued that the department was aware of the manufacturing activity in 1998-99, and thus, the extended period of limitation should not have been invoked based on suppression of facts. The Tribunal acknowledged the plea but deferred a decision, stating that the lower appellate authority should examine and provide a reasoned decision on the time-bar issue after affording the assessee a fair opportunity to present their case. Therefore, the appeal of the Revenue was allowed on merits, but the Tribunal directed the lower appellate authority to consider and decide on the limitation plea raised by the assessee.

In conclusion, the Tribunal upheld the excisability of the assembled glazing system, setting aside the lower appellate authority's decision. However, the Tribunal highlighted the necessity for the lower appellate authority to address the time-bar issue raised by the assessee regarding the demand of duty on the glazing system, ensuring a fair opportunity for the assessee to present their arguments before a decision is rendered.