2004 (6) TMI 129 - AT - Central Excise

Summary

Issues:
1. Whether the goods manufactured by the appellant are exempt from payment of duty under specific notifications.
2. Whether the goods were manufactured at the site as per the requirements of the notifications.
3. Interpretation of the term 'site' in the context of the notifications.
4. Application of previous judgments regarding the location of manufacturing sites.

Analysis:

1. The appellant entered into a contract with Gujarat Maritime Board for the repair and rehabilitation of breakwaters at Veraval Port, involving the manufacturing of tetrapodes as per provided drawings. The dispute revolves around whether the goods fall under the exempt category as per specific notifications. The notifications exempt goods under Chapter 68.07 of CETA when manufactured at the site. The primary issue is whether the goods in question were manufactured at the designated site.

2. The Commissioner noted that the tetrapodes were fabricated at a site different from where they were used, which raised questions about the applicability of the notifications. The Board's circular clarified that the term 'site' includes any premises specified in the contract for fabrication, provided the goods are solely used in the construction work. The Commissioner held that since the appellant fabricated the goods at a site hired by them, not specifically mentioned in the contract, the notifications did not apply strictly.

3. The Board's circular emphasized that the term 'site' should not be narrowly interpreted and includes premises made available for fabrication as per the contract. In this case, it was evident that the goods manufactured were solely used in the construction work, and the site was approved by GMB, indicating awareness from both parties. The fact that GMB assisted in procuring the site for fabrication further supported the argument that the notifications should apply.

4. Previous judgments were cited to support the broader interpretation of the term 'site' in similar cases. The Tribunal had ruled that the location of manufacturing need not be precisely at the construction site for the notifications to apply. Instances were provided where the principal's assistance in site procurement was considered sufficient to meet the criteria for exemption. In this context, the Tribunal overturned the Commissioner's decision and allowed the appeal, considering the goods were manufactured at an approved site and used in the construction work as per the contract.