2003 (11) TMI 133 - AT - Central Excise

Issues Involved:
1. Exigibility of fabricated goods to Central Excise duty.
2. Classification of fabricated pipes under Central Excise Tariff.
3. Marketability and identity of the fabricated pipes.
4. Determination of the manufacturer for the purpose of excise duty.

Detailed Analysis:

1. Exigibility of Fabricated Goods to Central Excise Duty:

The primary issue in this appeal is whether the goods fabricated by M/s. Raunaq International Ltd. are exigible to Central Excise duty. The Assistant Collector initially held the pipes as excisable and classified them under sub-heading 7305.90 of the Central Excise Tariff. The Tribunal remanded the matter to examine the marketability and classification of the pipes, and whether they could be deemed as "goods."

Upon remand, the Deputy Commissioner concluded that the pipes are capable of being marketed and are thus exigible to excise duty. The pipes were fabricated before being fitted into the plant, negating the argument of immovability.

2. Classification of Fabricated Pipes under Central Excise Tariff:

The Commissioner (Appeals) classified the pipes under Heading 73.08, considering them as parts of structures based on Section 37B Order No. 58/1/2002-CX. However, the Revenue contended that the pipes should be classified under sub-heading 7305.90, as they are fabricated by bending and welding steel sheets into pipes of small running lengths, known specifically as L.P. Pipes/C.W. Pipes.

The Tribunal noted that the pipes, having a circular cross-section and an external diameter exceeding 406.4 mm, are classifiable under Heading 73.05. The explanatory notes of the HSN support this classification, indicating that pipes used for structural columns remain classified under Heading 73.05, not 73.08.

3. Marketability and Identity of the Fabricated Pipes:

The respondents argued that the fabricated goods are not marketable as they are made as per the designs and specifications of their customer. However, the Tribunal emphasized that marketability requires that goods should be marketable as such, not necessarily actually marketed. The pipes, having a distinct name, character, and use, satisfy the marketability test.

The Tribunal referenced the case of M/s. J.S.T. Engineering Services v. C.C.Ex., Jamshedpur, where it was held that steel pipes, even if fabricated as per customer specifications, are marketable and thus exigible to excise duty.

4. Determination of the Manufacturer for the Purpose of Excise Duty:

The respondents contended that the work of cutting steel plates was done by a sub-contractor, M/s. Vaishey Engineers & Erectors, and thus the sub-contractor should be considered the manufacturer. However, the Tribunal noted that the issue of who is the manufacturer was not remanded for reconsideration and no appeal was preferred by the respondents on this aspect. Therefore, the respondents cannot now claim that they are not the manufacturers.

Conclusion:

The Tribunal concluded that the pipes fabricated by M/s. Raunaq International Ltd. are exigible to Central Excise duty under Heading 73.05. The pipes are marketable and have a distinct identity before being fitted into the plant. The Tribunal set aside the impugned order and allowed the appeal filed by the Revenue.

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