2023 (8) TMI 534 - AT - Central Excise

Marketability - intermediate goods or not - clearance of fabricated steel structures being unfinished goods - revenue is of the view that the steel structures were cleared by the appellant are manufactured goods - HELD THAT - A similar issue has been examined by the Hon ble High Court of Karnataka in the case of THUNGABHADRA STEEL PRODUCTS LTD. VERSUS UNION OF INDIA 1997 (3) TMI 119 - HIGH COURT OF KARNATAKA AT BANGALORE , wherein High Court held that the parts which has been cleared by the appellant are inter-mediate parts of final product consisting of all raw materials becomes the final structure which is identifiable, therefore, on the clearance of this intermediate parts, no duty is leviable. Therefore, following the said decision, as the appellant has cleared the above said parts being intermediate product for fabrication of the entire structure, which is identifiable, therefore, it is held that the appellant is not liable to pay duty on the intermediate parts cleared by them for fabrication of the structures identifiable as Gantry Crane. Thus, no duty is payable by the appellant. Accordingly, the impugned orders are set aside and the appeals are allowed.

Summary

Issues involved: Interpretation of Central Excise Act, 1944 regarding clearance of manufactured goods without payment of duty.

The judgment dealt with the issue of whether certain fabricated steel structures cleared by the appellant, which were considered as intermediate parts for the fabrication of a gantry crane, were liable for excise duty. The appellant argued that the fabricated steel structures did not have independent commercial identity and were not marketable goods within the meaning of the Central Excise Act, 1944. The revenue contended that the steel structures were manufactured goods and demanded duty payment from the appellant for their clearance without duty. The Tribunal referred to a similar case decided by the Hon'ble High Court of Karnataka and held that the intermediate parts cleared by the appellant, which were identifiable and formed part of the final structure, were not liable for excise duty. Therefore, the Tribunal ruled in favor of the appellant, stating that no duty was payable on the intermediate parts cleared for the fabrication of the gantry crane.

The Tribunal emphasized that the fabricated steel structures cleared by the appellant were intermediate parts necessary for the fabrication of the entire structure, which was identifiable as the Gantry Crane. Citing the decision of the Hon'ble High Court, the Tribunal concluded that no duty was leviable on the clearance of such intermediate parts. Therefore, the Tribunal held that the appellant was not liable to pay duty on the intermediate parts cleared by them for the fabrication of the identifiable structure. Consequently, the impugned orders demanding duty from the appellant were set aside, and the appeals were allowed with any consequential relief.