2005 (2) TMI 173 - AT - Central Excise

Summary

Issues:
1. Invocation of larger period of limitation for demanding Central Excise duty.
2. Determination of whether the process carried out by the appellants amounted to the manufacture of windows.
3. Assessment of duty liability on the parts of windows versus the full windows.
4. Consideration of the registration status of the appellants as manufacturers.

Analysis:

1. The Tribunal noted that the show cause notice invoked a larger period of limitation for demanding Central Excise duty from the appellants. The notice alleged that the appellants manufactured excisable goods with the intention to evade duty. Despite the issue of limitation being raised, it was not pressed during the hearing. The disputed period was from September 1997 to January 1998, and the notice was issued in June 1999. The Tribunal found that the demand pertained to a period before the appellants got registered as manufacturers, justifying the invocation of a larger period of limitation.

2. The Tribunal examined whether the process undertaken by the appellants constituted the manufacture of windows. The process involved cutting aluminum profiles, joining them with screws, fixing frames to walls, and installing glass into the frames. The original authority considered this process and concluded that the windows only came into existence after being permanently fixed, making them immovable goods. The Tribunal agreed with the appellants that the duty should be on parts of windows, not on the full windows, as the latter were not excisable once permanently fixed to a structure.

3. It was observed that while windows could be excisable if they existed before being fitted to walls, in this case, the parts were permanently fixed, making them non-excisable. The impugned order incorrectly demanded duty on full windows instead of parts. The Tribunal accepted the appellants' argument that the windows they manufactured were not excisable in the given circumstances. The duty liability was determined to be on the parts of windows, not on the completed windows.

4. Despite the appellants being registered as manufacturers of windows, filing a classification list, and depositing duty, the Tribunal concluded that they were liable to pay duty on parts of windows, not on the windows themselves. The Department's demand for duty on full windows was deemed incorrect. The Tribunal also affirmed that the appellants were the manufacturers, not hired contractors as determined by the Commissioner.

In conclusion, the appeal was allowed in favor of the appellants, and any consequential relief was granted. The Tribunal set aside the impugned order, emphasizing that the duty liability was on the parts of windows, not on the fully manufactured windows.