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2008 (5) TMI 283 - AT - Central ExciseErection of boiler manufacture duty liability - CVL had cleared the boiler in SKD/CKD condition including its accessories on payment of duty held that - . In both the final orders, the Tribunal had found that CVL had cleared boilers in CKD/SKD condition which were assembled at the customer s site along with duty paid components procured from other vendors. CVL had classified the impugned goods removed from its factory as boilers in CKD/SKD condition falling under CH 8448.10 after filing the classification declaration under Rule 173B of CER. They had discharged duty on the goods manufactured and cleared to the customer s site, at the rates applicable to boilers. At the customer s site the components were assembled into boilers and erected piece by piece, on a concrete foundation. Such boilers could be removed only by dismantling them into parts. It had been found that on assembly and erection, the new item that had emerged in each case was immovable property not exigible to excise duty.
Issues:
1. Interpretation of the judgment of the Hon'ble Supreme Court in the case of CCE, Indore v. Cethar Vessels Ltd. 2. Classification of goods cleared by M/s. Cethar Vessels Limited (CVL) under CH No. 8402 of Central Excise Tariff Act, 1985. 3. Assessment of duty on differential value of boilers compared to the aggregate value of boiler parts cleared by CVL. 4. Determination of whether the erection of boilers at the customer's site resulted in the creation of immovable property. 5. Application of case laws regarding the classification of goods as immovable property after assembly and erection at the buyer's site. Analysis: 1. The judgment of the Hon'ble Supreme Court in the case of CCE, Indore v. Cethar Vessels Ltd. remanded the cases to the Tribunal for adjudication in light of Circular No. 58/1/2002-CX and the judgment in CCE, Indore v. Virdi Brothers. The Tribunal was directed to consider relevant factual aspects which were not previously taken into account. 2. The adjudicating authorities determined that the goods cleared by CVL were components of a boiler, and what emerged at the customer's site constituted a new item, namely boilers. This led to the imposition of duty on the differential value of the boilers compared to the value of the cleared components. The Tribunal upheld this classification in its final orders. 3. CVL had cleared boilers in SKD/CKD condition, including accessories, and had paid duty on them. The Tribunal found that the duty paid nature of the boilers was not disputed. The classification of the goods as boilers under CH 8402.10 was supported by invoices and circulars issued by CBEC. 4. The Tribunal considered whether the erection of boilers at the customer's site resulted in the creation of immovable property. Case laws such as TRF Ltd. v. CCE and Blue Star Ltd. v. CCE were cited to support the argument that systems erected at the customer's site could be considered immovable property, not liable to duty. 5. The Tribunal analyzed various case laws to determine that goods assembled and erected at the buyer's site, resulting in immovable property, were not excisable. The final orders passed by the Tribunal followed the instructions contained in the Board's Circular and the judgment of the Hon'ble Supreme Court, which upheld the Tribunal's decision. In conclusion, the Tribunal allowed the appeals filed by CVL, M/s. Bridgestone ACC India Ltd., and Shri P.S. Sundararajan, based on the findings that the assembled boilers constituted immovable property not exigible to excise duty. The Tribunal's decision was in line with the legal principles established by previous judgments and circulars issued by the Central Board of Excise and Customs.
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