2001 (5) TMI 918 - AT - Central Excise

Summary

Issues Involved:
Challenge to adjudication order demanding duty, penalty, and confiscation of refrigeration plants.

Analysis:

1. Demand of Duty: The Commissioner confirmed duty of Rs. 58,25,580.00 on noticee No. 1, who constructed refrigeration plants. The duty was imposed on items like storage tank, cooling coil, compressor, and condenser. The appellant contended that these items were bought out from manufacturers who had already paid duty on them, thus should not be subjected to further duty liability.

2. Penalties Imposed: Apart from duty, penalties were imposed under Section 11AC of the Act and Rule 173Q of the Rules on the appellant. The appellant challenged the imposition of these penalties in the appeal.

3. Confiscation of Refrigeration Plants: The order of adjudication confiscated the refrigeration plants belonging to noticee Nos. 2 to 12. The appellant, noticee No. 1, challenged this confiscation in the appeal, arguing that the construction of refrigeration plants utilizing bought out items did not amount to manufacturing a new marketable commodity.

4. Nature of Refrigeration Plants: The appellant, M/s. Virdi Brothers, contended that the refrigeration plants were not goods excisable to duty under the Act. They argued that the refrigeration system consisted of various components like storage tank, cooling coil, compressor, and condenser, which were bought out items already subjected to duty by their manufacturers.

5. Legal Precedents: The judgment referred to legal precedents where structures attached to concrete bases were considered immovable property and not liable to excise duty. The Tribunal cited cases where machinery affixed to buildings or structures were deemed immovable property, supporting the argument that the refrigeration plants in question were not excisable goods.

6. Final Decision: The Tribunal held that the Commissioner had erred in demanding duty, imposing penalties, and confiscating the refrigeration plants. The entire order of adjudication was deemed devoid of substance and was quashed in its entirety. The appeals were allowed, and the impugned order was set aside.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the appellant, relevant legal precedents, and the final decision of the Tribunal quashing the impugned order of adjudication.