1998 (4) TMI 140 - HC - Central Excise

Summary

Issues involved:
1. Writ of mandamus for directing respondents to forbear from levying excise duty on structural fabrication work.
2. Writ of declaration on the ultra vires nature of Heading 73.08 of the Central Excise Tariff Act, 1985.
3. Challenge against the imposition of excise duty on structural fabrication work at a project site.

Analysis:
1. The petitioners, structural engineering contractors, undertook work involving structural steel processing for various organizations. Despite authorities confirming that their work did not constitute manufacturing goods, revenue later claimed the work fell under Heading 7308 of the Tariff Act. The petitioners argued that their work did not involve the creation of goods as per legal precedents. The issue revolved around whether the work qualified as manufacturing under the new Tariff Act.

2. The petitioners contended that the levy of duty on structural fabrication work was a misinterpretation of Chapter 73 and was unconstitutional. Legal references were made to support the argument that excise duty should only apply to goods that were manufactured and marketable. The petitioners challenged the classification under Heading 7308.90 and Heading 9406.00, emphasizing that their work did not involve manufacturing pre-fabricated buildings.

3. A counter was filed regarding a similar case where the duty was demanded for fabricated items made of iron and steel. The counter highlighted the classification under Chapter sub-heading 7308.90 and the subsequent amendments. The argument focused on the excisability of the structurals under the new Tariff Act and the relevance of pending Tribunal decisions. The petitioners' case was compared to a previous judgment, emphasizing the excisability of items falling under Chapter sub-heading 7308.90.

4. The judgment referred to various legal precedents, including Moti Laminates Pvt. Ltd. v. Collector of Central Excise, to establish the principle that goods not marketable were not liable for duty. The Madhya Pradesh High Court's decision in Kinetic Honda Motors Ltd. v. Union of India was cited to support the argument that certain processes did not amount to manufacturing. The judgment concluded that the petitioners' work did not result in marketable goods subject to excise duty, granting relief in two writ petitions while dismissing the third.

5. Ultimately, the court allowed two writ petitions while dismissing one, stating that the petitioners did not engage in manufacturing marketable goods subject to excise duty. The court did not find it necessary to declare Heading 73.08 of the Tariff Act ultra vires, considering the decision in the other writ petitions. No costs were awarded in the judgment.