2005 (3) TMI 255 - AT - Central Excise

Summary

Issues involved:
1. Barred by limitation - Delay in issuing show cause notice.
2. Manufacture of PSC girders - Excisability and duty payment.
3. Marketability of PSC girders - Conflicting decisions.
4. Applicability of Notification No. 59/90 and 51/95 - Exemption eligibility.
5. Valuation of goods - Costing method and assessable value.
6. Confiscation of girders and imposition of penalties.

Issue 1: Barred by limitation - Delay in issuing show cause notice
The appellants argued that the show cause notice was issued beyond the statutory period of six months, contending that the Department had knowledge of the manufacturing activity earlier. The Department justified the delay citing the appellants' refusal to obtain Central Excise registration and provide necessary information promptly. The Tribunal held that the larger period of limitation could be invoked as there was deliberate contravention of Central Excise Rules with an intent to evade duty. The contention of inordinate delay in issuing the notice was rejected, emphasizing that the Department's instructions must be followed, and the plea of bona fide belief does not absolve the assessee.

Issue 2: Manufacture of PSC girders - Excisability and duty payment
The Tribunal rejected the argument that making PSC girders for a bridge does not amount to manufacture. It emphasized that girders are separate goods that come into existence through specific processes, making them dutiable. The Tribunal clarified that the assessment is on the girders, not the bridge, and highlighted that the girders are dutiable even before being placed on the bridge. The contention that the girders were immovable property due to being fixed on the bridge was dismissed.

Issue 3: Marketability of PSC girders - Conflicting decisions
Conflicting decisions existed regarding the marketability of PSC girders. While one Tribunal held them excisable, another bench ruled them as not marketable. The matter was deemed crucial and referred to a Larger Bench for a conclusive decision on whether PSC girders are marketable goods attracting Central Excise duty.

Issue 4: Applicability of Notification No. 59/90 and 51/95 - Exemption eligibility
The appellants claimed exemption under Notification No. 59/90 for goods manufactured at the site for bridge construction. However, the Commissioner argued that the notification did not cover goods used in bridge construction and that Notification No. 51/95 was applicable. The Tribunal upheld the Commissioner's stance, denying the appellants the benefit of exemption under Notification No. 59/90.

Issue 5: Valuation of goods - Costing method and assessable value
The Commissioner valued the goods based on costing methods, considering total costs, labor charges, and profit. The appellants' plea regarding the difficulty in assigning values to individual items in a work contract was rejected, and the valuation method was upheld by the Tribunal.

Issue 6: Confiscation of girders and imposition of penalties
The Tribunal upheld the confiscation of girders cleared without duty payment, emphasizing that becoming part of the bridge did not affect their confiscability. However, the penalties under Section 11AC and interest under Section 11AB were set aside due to the period being prior to September 1996.

In conclusion, the Tribunal addressed various issues concerning the manufacture, excisability, marketability, exemption eligibility, valuation, confiscation, and penalties related to the PSC girders, providing detailed analyses and clarifications on each aspect while referring conflicting decisions to a Larger Bench for resolution.