2008 (5) TMI 116 - AT - Central Excise

Excisability / Marketability of pre-cast concrete girders used for Delhi Metro Rail - the goods are marketable - pre-stressed girders manufactured not at the construction site but at the casting yard and used in construction of bridges in execution of works contract on turn-key basis, amounts to manufacture of excisable goods - 50% of demand ordered to be deposited

Summary

Issues involved:
1. Requirement of pre-deposit under Central Excise Act for excise duty, redemption fine, and penalty.
2. Release of seized pre-fabricated structural components for construction under Delhi Metro Rail Project.
3. Dispute regarding marketability of pre-fabricated or pre-stressed structural components or girders.
4. Interpretation of 'manufacture' under Central Excise Act.
5. Prima facie case for waiver of pre-deposit based on marketability of goods.

Analysis:

1. The judgment dealt with the requirement of pre-deposit under the Central Excise Act, where the appellant was directed to pre-deposit a specific amount as excise duty, redemption fine, and penalty to maintain an appeal under Section 35F. The appellant sought a waiver of pre-deposit and stay, which was under consideration by the Tribunal.

2. The Tribunal noted that the pre-fabricated structural components had been seized but were released to the appellant for construction under the Delhi Metro Rail Project in public interest. This release was the second time such goods were released on execution of a bond related to registration under the Central Excise Act.

3. A key issue in the judgment was the dispute over the marketability of pre-fabricated or pre-stressed structural components or girders manufactured by the appellant for the Delhi Metro Rail Corporation Ltd. The appellant argued that the goods were not marketable as they were location-specific and part of a turn-key contract.

4. The judgment delved into the interpretation of 'manufacture' under the Central Excise Act concerning the production of pre-stressed speed girders falling under a specific chapter sub-heading. The appellant contended that the manufacture of girders did not meet the test of marketability as required by the Act.

5. The Tribunal analyzed the prima facie case for waiver of pre-deposit based on the marketability of the goods. It referenced Supreme Court judgments emphasizing that marketability does not depend on actual sales or general availability in the market but on the commercial identity of the article known to the market for buying and selling. The Tribunal found that the goods in question were marketable, supporting the Revenue's case.

6. Referring to previous Larger Bench decisions, the Tribunal concluded that the fabrication and use of pre-stressed girders in construction projects constituted the manufacture of excisable goods. Based on these findings, the Tribunal directed the appellant to make a partial deposit within a specified timeframe, with the remaining pre-deposit amount waived pending appeal disposal.

This detailed analysis covers the various legal issues addressed in the judgment, providing a comprehensive understanding of the Tribunal's decision.