2001 (7) TMI 168 - AT - Central Excise

Summary

Issues Involved:
1. Excisability of the cement clinker plant.
2. Duty demand on hoppers, ducts, chutes, etc.
3. Duty demand on Electro Static Precipitator (ESP).
4. Duty demand on scrap from dismantling machinery.
5. Duty demand on waste and scrap from the cement manufacturing unit.

Detailed Analysis:

1. Excisability of the Cement Clinker Plant:
The appeal contested the Adjudication Order demanding Central Excise duty on a cement clinker plant installed by the appellant, arguing it was immovable property and not excisable goods. The order classified the plant under chapter 8474.10 of the Central Excise Tariff, rejecting the appellant's plea. The Tribunal emphasized that the plant, comprising several machines and structures embedded to earth, failed the marketability test. The Tribunal cited the Apex Court's decision in Triveni Engineering and Industries Ltd., which required goods to be marketable. The Tribunal concluded that the cement clinker plant could not be moved as a single unit and thus was not excisable. The Tribunal set aside the duty demand and penalties on this ground.

2. Duty Demand on Hoppers, Ducts, Chutes, etc.:
The appellant argued that the demand was time-barred, having informed the Central Excise authorities about the fabrication of these items in 1994. The Tribunal agreed, stating that the appellant had informed the authorities and claimed an exemption under Notification No. 46/94. The Tribunal held that the extended period for demand under Section 11A of the Central Excise Act could not be invoked as there was no suppression of facts or intent to evade duty. The Tribunal set aside the duty demand on these items.

3. Duty Demand on Electro Static Precipitator (ESP):
The appellant claimed that the ESP, assembled at the site, was exempt under Notification No. 67/95. The Tribunal noted that the dutiability of goods is a legal question that can be raised at the appeal stage. The Tribunal remanded the issue to the Commissioner for fresh consideration of the appellant's exemption claim.

4. Duty Demand on Scrap from Dismantling Machinery:
The appellant contended that the scrap arose from dismantling condemned machinery sold on an "as is where is" basis, and thus was not a result of manufacturing. The Tribunal agreed, referencing its decision in Diesel Component Works, Patiala, which held that scrap from dismantling old machinery is not excisable. The Tribunal concluded that dismantling is not a manufacturing process and set aside the duty demand on scrap.

5. Duty Demand on Waste and Scrap from the Cement Manufacturing Unit:
The appellant argued that the waste and scrap arose from the factory's operation and were not manufactured goods. The Tribunal supported this, stating that excise duty applies to manufactured goods, not waste or scrap resulting from factory operations. The Tribunal found no reliable evidence of manufacturing and deemed the duty demand based on assumptions. The Tribunal quashed the duty demand, penalties, and interest, allowing the appeal.

Conclusion:
The Tribunal set aside the duty demands and penalties related to the cement clinker plant, hoppers, ducts, chutes, and scrap. The issue of the ESP's dutiability was remanded for further consideration. The Tribunal emphasized that excise duty applies to manufactured goods, not immovable property or waste and scrap from dismantling operations.