2019 (2) TMI 1369 - AT - Central Excise

Process amounting to manufacture or not - Immovable property or not - workstations, partitions, storage units, tables etc. Came into existence, piece by piece, at the site of the customers and were permanently embedded/fixed to the ground - Held that - The Commissioner has aptly considered the items for purpose of holding whether the processes under taken amount to manufacture as per the test laid down in the order of Hon ble Supreme Court in case of Craft Interiors 2006 (10) TMI 2 - SUPREME COURT OF INDIA - However in their appeal revenue has failed to consider the complete findings recorded by Commissioner in respect of each item. There is no merit in the revenue s appeal - appeal of Revenue dismissed.

Summary

Issues Involved:
1. Excisability of workstations.
2. Excisability of credenza.
3. Excisability of bought-out items.

Detailed Analysis:

1. Excisability of Workstations:
The Commissioner (Adjudication) held that workstations do not come within the ambit of furniture as understood in trade parlance and are more a part of the immovable structure, as they cannot be removed without cannibalizing them. The Revenue challenged this, arguing that the Commissioner did not explain how the workstations are immovable or cannot be removed without cannibalization, failing to satisfy the test laid down by the Supreme Court. The Tribunal noted that the Commissioner relied on the manufacturing process provided by the company, including statements, photographs, and CDs, and concluded that site-made workstations are fixtures and not excisable goods. The Tribunal upheld the Commissioner’s findings, noting that the Revenue failed to provide evidence to the contrary.

2. Excisability of Credenza:
The Commissioner (Adjudication) found inconsistencies in the assessee's descriptions of credenza but ultimately held that credenzas are bought-out items and should be excluded from excisable goods. The Revenue contended that bought-out items, if supplied along with other items, should form part of the value of assessment for levy of Central Excise duty. The Tribunal observed that the Commissioner considered credenzas as part of the interior decoration jobs and not as excisable goods, aligning with the Supreme Court’s test in the Craft Interiors case. The Tribunal upheld the Commissioner’s decision, citing the lack of evidence from the Revenue to classify credenzas as excisable goods.

3. Excisability of Bought-out Items:
The Commissioner (Adjudication) held that bought-out items such as sofas, stands, keyboard trays, drawer units, tables, and parts of furniture like panels, table tops, and drawer units are not excisable. The Revenue argued that bought-out items should be included in the assessable value if supplied along with manufactured items. The Tribunal found that the Commissioner correctly excluded these items from excisable goods, as they were part of the interior decoration job and not procured for further sale. The Tribunal noted that the activities amounted to service as interior decorators/construction service, for which the assessee had paid service tax.

Conclusion:
The Tribunal concluded that the Commissioner had aptly considered the items for the purpose of determining whether the processes undertaken amounted to manufacture as per the Supreme Court’s test in the Craft Interiors case. The Revenue failed to address the complete findings recorded by the Commissioner. Therefore, the Tribunal dismissed the appeals filed by the Revenue and upheld the order of the Commissioner. The operative portion of the order was pronounced in Open Court on 20/02/2019.