2002 (12) TMI 126 - AT - Central Excise

Issues Involved:
1. Whether the aluminium doors and windows were manufactured at the basement of the site.
2. Whether the processes carried out amounted to manufacture.
3. Whether the products were excisable goods.
4. Whether the extended period of limitation for demanding Central Excise duty is invokable.
5. Whether the value mentioned in the show cause notice should be taken as "cum-duty value."
6. Whether the penalty is imposable on the appellants.

Issue-wise Detailed Analysis:

1. Manufacturing at the Basement:
The primary issue was whether M/s. Mahavir Aluminium Ltd. manufactured aluminium doors and windows at the basement of the site. The appellants contended that the basement was used for storing materials and that the actual assembly of doors and windows occurred at the respective floors of the building. The Revenue based its findings on statements from various employees, including Shri Marwah, who mentioned that assembly activities took place at the site. However, the Tribunal observed that the statement of Shri Marwah did not conclusively prove that complete doors and windows were assembled at the basement. The Tribunal found the explanation offered by Shri Marwah in his affidavit plausible and noted that the Revenue failed to rebut this explanation with additional evidence or cross-examination. Consequently, the Tribunal concluded that the entire assembly did not occur at the basement.

2. Processes Amounting to Manufacture:
The appellants argued that the processes carried out did not amount to manufacture as no new product known to the market came into existence. They cited several Supreme Court judgments, including Municipal Corporation of Greater Bombay v. Indian Oil Corporation and Triveni Engineering & Industries Ltd. v. CCE, which established that goods must be marketable and movable to be considered manufactured. The Tribunal agreed with the appellants, noting that the doors and windows came into existence only as part of the building and could not be removed as such for market sale. The Tribunal concluded that the processes carried out did not amount to manufacture.

3. Excisable Goods:
The appellants contended that the doors and windows were not "goods" or "marketable" as they became part of the immovable property upon installation. The Tribunal referred to the Supreme Court's test of marketability and mobility, concluding that the doors and windows did not satisfy these attributes as they were embedded in the walls and became immovable property. The Tribunal held that the products were not excisable goods.

4. Extended Period of Limitation:
The appellants argued that the extended period of limitation for demanding duty could not be invoked as there was no clarity about the excisability of the products. They cited various decisions to support their bona fide belief about the non-excisability of the goods. The Tribunal did not delve into this issue in detail, as it had already concluded that the products were not excisable goods and the processes did not amount to manufacture.

5. Cum-duty Value:
The appellants contended that the value mentioned in the show cause notice should be taken as "cum-duty value" and that the value should be reworked after deducting installation charges, profit, and permissible deductions. The Tribunal did not address this issue specifically, as it had already decided in favor of the appellants on the primary issues.

6. Penalty Imposition:
The appellants argued that no penalty should be imposed as they acted under a bona fide belief and had no intention to evade duty. They cited several judgments to support their claim. The Tribunal did not specifically address the penalty issue, as it had already concluded that the products were not excisable goods and the processes did not amount to manufacture.

Conclusion:
The Tribunal allowed the appeal filed by M/s. Mahavir Aluminium Ltd., holding that the aluminium doors and windows were not manufactured at the basement, the processes did not amount to manufacture, and the products were not excisable goods. Consequently, the demand for duty and the imposition of penalties were set aside.

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