2019 (2) TMI 252 - AT - Central Excise

Process amounting to manufacture - goods installed at site - test of movability - clearance of aluminium frames from factory at Delhi and manufacture of USGS and AW at the project site - removal of USGS AND AW without payment of duty for installation at the site - whether the process amoung to manufacture and whether UGSG and AW are excisable goods? - Held that - if the goods installed at site are capable of being sold or shifted as such, after removal from the base, then the goods would be considered to be movable and excisable. In the present appeal, the department has no case that the goods installed/structure erected can be shifted or disassembled without causing damage to the components/parts. Even as per the circular, the goods then would be immovable property and, therefore, not excisable to duty. The learned counsel has rightly pointed out that if the curtain wall/AWs, cladding are pulled down or dismantled, it would result in scrap only. Time Limitation - Held that - The appellant cannot be saddled with the guilt of suppression of facts with intention to evade payment of duty. There is no evidence to establish such suppression of facts - moreover, the issue was under litigation and is an interpretational one - the demand raised invoking the extended period cannot sustain. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Restoration of appeal dismissed for default.
2. Classification and excisability of aluminium doors, windows, and Unitized Structural Glazing System (USGS).
3. Applicability of extended period for demand under proviso to section 11A(1) of the Central Excise Act.
4. Determination of whether the activities at the project site amounted to manufacture.
5. Limitation and suppression of facts with intent to evade duty.

Issue-wise Detailed Analysis:

1. Restoration of Appeal Dismissed for Default:
The appellant sought restoration of an appeal dismissed on 02.08.2018 due to the counsel’s delayed arrival caused by a flight delay. The Tribunal found the delay unintentional and restored the appeal, noting the counsel's presence and submission of travel documents as evidence.

2. Classification and Excisability of Aluminium Doors, Windows, and USGS:
The appellant, engaged in manufacturing aluminium doors, windows, and USGS, was alleged to have manufactured and installed these items at a project site without paying excise duty. The department classified the goods under CSH 7610.90 and 7610.10 of CETA, 1985, demanding duty and penalties. The appellant argued that similar issues had been resolved in their favor in previous cases, and the activities did not amount to manufacture as per the Tribunal's earlier decisions.

3. Applicability of Extended Period for Demand:
The department issued a show-cause notice for the period 06.06.2001 to 03.09.2001, invoking the extended period under section 11A(1) due to alleged suppression of facts. The appellant contended that they had informed the department of their activities and protested the duty liability in 2000, thus negating any suppression intent. The Tribunal found the extended period inapplicable due to the appellant's prior disclosure and ongoing litigation on the issue.

4. Determination of Whether Activities Amounted to Manufacture:
The Tribunal examined whether the activities at the project site constituted manufacture. It referred to previous adjudications where similar activities were deemed non-manufacturing, as the erected structures became immovable properties. The Tribunal reiterated that dismantled structures would result in scrap, aligning with the Board’s circular No. 58/1/2002-CX, which clarified that immovable goods are not excisable.

5. Limitation and Suppression of Facts:
The appellant argued that the show-cause notice was time-barred and that there was no suppression of facts as they had consistently communicated with the department. The Tribunal agreed, noting the appellant's transparency and the interpretational nature of the issue. It concluded that the demand raised by invoking the extended period was unsustainable.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal with consequential reliefs. It held that the activities did not amount to manufacture, the demand was time-barred, and there was no suppression of facts by the appellant. The judgment emphasized the importance of judicial consistency and the non-excisability of immovable property.

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