2016 (8) TMI 941 - AT - Central Excise

Benefit of excise duty - Notification No. 5/2006-CE and subsequent notifications - fabrication of RCC pipes and laying the pipes at various depths below the ground level as per the details in the agreement - goods have been fabricated not at the site of construction of the sewage system but at a different site - Held that - in view of the decision of Tribunal in the case of Simplex Concrete Piles (India) Ltd. vs. CC&CE, Rajkot 2004 (6) TMI 129 - CESTAT, MUMBAI wherein it was held that the CBEC Circular dated 18.05.1999 has been considered and the benefit of excise duty exemption for goods manufactured at site has been extended in a case where goods were manufactured for use in the construction of break waters of Veraval Port at a private plot at a site which was 1.5 km away from the said port, the appellant will be eligible for the benefit of excise duty under Notification No. 5/2006-CE and subsequent notifications which grant exemption for such goods manufactured at site. In such a view of the matter, we consider it not necessary to examine the valuation aspect of the pipes inasmuch as we hold that no excise duty liability arises on pipes. - Decided in favour of appellant

Summary

Issues:
1. Challenge to orders passed by Commissioner of Central Excise, Indore and Commissioner of Central Excise, Raipur.
2. Exemption of RCC pipes from excise duty under specific notifications.
3. Dispute regarding the valuation of pipes for charging excise duty.
4. Interpretation of notifications regarding goods manufactured at the site of construction.
5. Applicability of exemption retrospectively and extension to alternate fabrication sites.
6. Comparison with previous circulars and case law for similar issues.

Analysis:
1. The appeals involved challenges against orders passed by the Commissioner of Central Excise, Indore, and Commissioner of Central Excise, Raipur, regarding the liability of excise duty on RCC pipes manufactured by the appellant for sewerage system construction.
2. The appellant claimed exemption from excise duty under specific notifications exempting goods manufactured at the site of construction for use in construction work at such site, which was denied in the impugned orders due to fabrication of pipes at alternate sites.
3. Dispute arose over the valuation of pipes for charging excise duty, with the Revenue basing the duty on the contract value minus laying charges, while the appellant argued for valuation based on Cost Accountant certificate prepared as per CAS-4 Costing Standards.
4. The interpretation of notifications exempting goods manufactured at the site of construction was crucial, with retrospective amendments and explanations expanding the definition of the site of construction to include alternate premises approved by the project agency.
5. The Tribunal considered the benefit of exemption should be extended to goods manufactured at alternate sites for practical reasons, contrary to the view that such benefit would only apply prospectively, citing circulars and case law supporting a broader interpretation of the term "site."
6. Relying on a CBEC Circular and precedent from a similar case, the Tribunal concluded in favor of the appellant's eligibility for excise duty exemption under the relevant notifications for goods manufactured at alternate sites, leading to the allowance of all five appeals and setting aside the impugned orders.