1995 (12) TMI 81 - HC - Central Excise

Summary

Issues Involved:
1. Legality of Trade Notice No. 15 of 1988 and Order dated 22nd March 1988.
2. Excisability of 'Columns', 'Girders', 'Trusses', and 'Purlins'.
3. Definition and applicability of 'manufacture' and 'goods' under Central Excise Law.
4. Marketability and movability of fabricated items.
5. Validity of the Trade Notice and the Notice dated 22nd March 1988.
6. Availability of alternative remedies.

Summary:

1. Legality of Trade Notice No. 15 of 1988 and Order dated 22nd March 1988:
The Petitioners challenged the legality of Trade Notice No. 15 of 1988 and the Order dated 22nd March 1988 passed by the Assistant Collector of Central Excise, Pune II Division, Pune. The Petitioners sought to quash and set aside these notices.

2. Excisability of 'Columns', 'Girders', 'Trusses', and 'Purlins':
The core issue was whether 'Columns', 'Girders', 'Trusses', and 'Purlins' are exigible to excise duty. The Petitioners argued that these items were not manufactured goods but were merely parts of a structure and thus immovable property. The Respondents contended that these items were distinct and marketable products resulting from a manufacturing process and were therefore subject to excise duty.

3. Definition and Applicability of 'Manufacture' and 'Goods' under Central Excise Law:
The Court referred to Section 3 of the Central Excises and Salt Act, 1944, which is the charging section for excise duty, and Section 2(d) defining 'excisable goods'. The Court noted that 'manufacture' implies a change resulting in a new and distinct article with a distinctive name, character, or use. The Supreme Court's rulings in Union of India v. Delhi Cloth and General Mills Co. Ltd. and South Bihar Sugar Mills Ltd. were cited, emphasizing that goods must be marketable to attract excise duty.

4. Marketability and Movability of Fabricated Items:
The Petitioners argued that the fabricated items were not marketable as they were specifically designed for the construction of 'J' Block and became immovable upon installation. The Respondents claimed that even items manufactured for captive consumption could be subject to excise duty if they were marketable.

5. Validity of the Trade Notice and the Notice dated 22nd March 1988:
The Court held that 'Columns', 'Girders', 'Trusses', and 'Purlins' did not satisfy the twin tests of being 'goods' and being 'marketable'. It was concluded that these items, upon fabrication, became part of the immovable structure and thus were not exigible to excise duty. Consequently, the Trade Notice dated 8th February 1988 and the Notice dated 22nd March 1988 were quashed to the extent they related to these items.

6. Availability of Alternative Remedies:
The Respondents argued that the Petitioners should have availed of alternative remedies before approaching the Court. However, the Court, relying on precedents, held that since the Petitioners had already been heard on merits and the items in question were ex facie not exigible to excise duty, there was no need to dismiss the petition on the ground of alternative remedies.

Conclusion:
The Petition was made absolute in terms of prayers (b), (c), and (d), and the Notice dated 22nd March 1988 was held invalid and quashed concerning 'Columns', 'Girders', 'Trusses', and 'Purlins'. The Court did not consider prayer (a) as it was not pressed by the Petitioners. There was no order as to costs.