2002 (5) TMI 182 - AT - Central Excise

Plant assembled at site out of duty paid goods - Dutiability - Demand - Limitation - Suppression of facts

Summary

Issues Involved:
1. Whether the assembly of goods at the site amounts to manufacture and whether they are excisable.
2. Who is the manufacturer: the supplier or the buyer.
3. Whether the invocation of the proviso to Section 11A(1) is justified in the case.

Detailed Analysis:

1. Assembly of Goods at Site and Excisability:
The primary issue was to determine if the assembly of goods at the site amounted to manufacturing and if these goods were excisable. The Commissioner examined each item supplied by M/s. Binny Ltd. to the sugar mills and determined their excisability based on whether they were affixed to the ground and were immovable property. The Commissioner found that:
- Items like juice weighing scales, vertical juice heaters, double effect pre-evaporators, vacuum pans, and juice sulphiter were superficially attached, movable, and hence dutiable.
- Items like syrup and molasses storage tanks, seed/vacuum vertical crystallizers, and certain other items were immovable and hence non-dutiable.
- The Commissioner concluded that the assembly of goods at the site did amount to manufacture under certain conditions, making them excisable.

2. Identification of the Manufacturer:
The Commissioner identified M/s. Binny Ltd. as the manufacturer of the parts and machineries assembled/erected at the sites. This conclusion was supported by the fact that M/s. Binny Ltd. had supplied the components and erected them at the site, and thus, they qualified as the manufacturer and were liable to pay duty.

3. Invocation of Proviso to Section 11A(1):
The crucial issue was whether the extended period for the demand of duty under the proviso to Section 11A(1) was justified. The Commissioner held that the invocation of the extended period was not justified because:
- M/s. Binny Ltd. had referred to the relevant contracts in all the invoices relating to the clearances of goods.
- They had been permitted by the Jurisdictional Assistant Collector to adopt invoice price assessment.
- The Commissioner found no evidence of suppression of facts by M/s. Binny Ltd. as they had disclosed necessary information through RT-12 returns and invoices.
- The Commissioner concluded that the charge of suppression would not stand, and hence, the demand failed on the question of time bar.

Conclusion:
The Tribunal upheld the Commissioner's decision, agreeing that M/s. Binny Ltd. was liable for duty on certain items but dismissed the Revenue's appeal on the grounds of time bar. The Tribunal also noted that the issue of manufacture and erection at the site was settled by the Hon'ble Supreme Court in various cases, confirming that items that remain goods after assembly are excisable, whereas items that become immovable property are not. The Tribunal found no infirmity in the Commissioner's order and confirmed the decision to drop the demand and not impose any penalty due to the time bar. The appeal filed by the Revenue was dismissed.