2017 (6) TMI 902 - AT - Central Excise

Manufacture - whether the fabrication and erection of steel structural by M/s. Saba Engineering Pvt. Ltd. at the site of the respondent amounts to manufacture or not? - Held that - the issue was a contentious issue during the relevant period which travelled upto the Larger Bench of the Tribunal and the Larger Bench in the case of Mahindra & Mahindra Ltd. Vs. Commissioner of Central Excise, Aurangabad & Ors. 2005 (11) TMI 103 - CESTAT, NEW DELHI , where it was held that The immovable iron and steel structures not being goods will not fall under Heading 73.08 of the Excise Tariff. The structurals after fabrication become immovable property and not capable of being shifted - The Larger Bench in the above decision has observed that when the structural are fixed to the earth they are not excisable. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the fabrication and erection of steel structural by a company at the site of another company amounts to manufacture.
2. Whether structurals fabricated at the site are liable to duty.

Analysis:
1. The appeal involved a dispute regarding whether the fabrication and erection of steel structural by one company at the site of another company constituted manufacturing. The Commissioner (Appeals) noted that similar appeals against other co-noticees had been dismissed previously. The impugned order dismissed the Revenue's appeal against the respondent based on the conclusions made in those previous appeals.

2. The respondent was only a co-noticee at whose site the fabrication took place. The show cause notice proposed penalties only against the respondent, while duty demands were raised against the companies conducting the fabrication work. The issue of whether the fabricated structurals were subject to duty had been contentious and had been addressed by the Larger Bench in a previous case involving Mahindra & Mahindra Ltd. The Larger Bench had clarified that immovable iron and steel structures, once fixed to the earth, were not considered excisable goods.

3. The Commissioner (Appeals) in the impugned order determined that the fabricated structurals, once attached to the earth and forming part of a building, ceased to be goods and were not capable of being shifted or bought and sold. The adjudicating authority had also concluded that the steel structurals were permanently attached to the earth, making them non-excisable. The Larger Bench's decision supported this view that fixed structures were not excisable.

4. Based on the above analysis and the precedent set by the Larger Bench, the Tribunal held that the Revenue's appeal lacked merit and was dismissed. The judgment clarified that once steel structurals were fixed to the earth and became immovable property, they were not subject to excise duty.

This detailed analysis of the judgment addresses the issues involved comprehensively, highlighting the key legal principles and conclusions drawn by the Tribunal in this case.