9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2005 (9) TMI 191 - AT - Central ExciseExcisability - duty demands - determination of levy of duty - BASE Transceiver Station (BTS) - Whether movable the installation activity at site would amount to manufacture ? - HELD THAT - The extract from the show cause notice clearly shows that the show cause notice had proposed to hold the entire BTS/BSC site (which is a prefabricated building/shelter in which the transceiver unit microwave equipments along with the other peripheral equipments are housed), along with the tower, as the transmission apparatus of Heading 8525. The activity of the building the house/room, installation of the aforesaid equipments and connecting of these equipments has been treated in the show cause notice as the process amounting to manufacture of such transmission apparatus. These sub system by themselves cannot perform on there own Transmission process required for Mobile cells without the Networking required. The reliance on Boards instruction is misplaced. BTS/BSC site are not marketable for another reason also. For installation of every BTS/BSC, License from WPC/SACFA a wing of Department of Telecommunications, Government of India has to be obtained, which invariably is user specific and site specific, meaning thereby if one wishes to sell the site to another user, it is not permissible under law, as the approval granted by the aforesaid authority for the frequency allocation and the site is for the user only and the purchaser would have to reapply for the license for that site. It cannot be sold/purchased marketed untendered be equated to marketable goods. BTS/BSC site therefore, are neither marketable nor capable of being marketed. In the view of the finding arrived that the said subsystem sites are not goods manufactured freely marketable nor the appellants a manufacturer, we do not propose to go into the alternate plea of eligibility to benefit under Notification 67/95-C.E. as capital goods. The plea is attractive but finds no need to be decided in these cases. Similarly the plea of time bar interest is not gone into since we find no duty demand could be effected in this case sites BTS/BSC not being excisable. We also do not find any material to equate the fixed sites on buildings as in this case with vehicle mounted such sites being shown by Ld. DR. The question of duty interest penalty as arrived in all these case therefore will not survive. In view of the findings arrived of no exisibility of BTS/BSC fixed sites on buildings, we would set aside the orders in all these appeals allow them for the same reasons. All appeals allowed after setting aside the orders impugned. Ordered accordingly.
Issues Involved:
1. Determination of levy of duty on Base stations under the Central Excise Act, 1944. 2. Whether the Base Transceiver Station (BTS) and Base Station Controller (BSC) sites are considered movable and thus subject to excise duty. 3. Whether the assembly and installation of BTS/BSC at the site amount to 'manufacture' under the Central Excise Act. 4. Applicability of Note 6 to Section XVI of the Central Excise Tariff Act, 1985. 5. Marketability and classification of BTS/BSC sites as 'goods' under the Central Excise Act. 6. Eligibility for benefit under Notification 67/95-C.E. as capital goods. 7. Consideration of time bar and interest in duty demand. Issue-wise Detailed Analysis: 1. Determination of Levy of Duty on Base Stations: The core issue in these appeals is the determination of levy of duty on Base stations under the Central Excise Act, 1944. The appellants are engaged in providing Cellular Telephonic Services and have set up BTS/BSC sites for this purpose. The Commissioner had confirmed duty demands on these sites, treating them as movable and subject to excise duty. 2. Movability of BTS/BSC Sites: The Commissioner found BTS/BSC sites to be movable, relying on the fact that these sites could be dismantled and relocated without substantial damage to their components. However, the Tribunal noted that the equipment needs to be dismantled into individual components, which involves damage to certain parts. Following the Supreme Court's decision in Triveni Engineering Industries Ltd. and the Board's Circular No. 58/1/2002-CX., the Tribunal concluded that the installation and erection of BTS/BSC do not constitute the manufacture of new commercial goods. 3. Assembly and Installation as 'Manufacture': The Tribunal found that the mere connection of individual equipment like BTS, microwave equipment, air conditioners, and battery backup at the site does not result in a new product coming into existence. Each equipment performs its function independently, and no new system or product emerges from their assembly. The Tribunal referred to the Supreme Court's decision in Moti Laminates Pvt. Ltd., which held that mere specification of a product's name in the Central Excise Tariff does not make it liable to duty. 4. Applicability of Note 6 to Section XVI: The show cause notice relied on Note 6 to Section XVI of the Central Excise Tariff Act, 1985, to allege that the activity at the site amounts to manufacture. The Tribunal found this reliance misplaced, as the show cause notice did not elaborate on how Note 6 was relevant. Note 6 applies to the conversion of an incomplete or unfinished article into a complete or finished article, which was not the case here. The Tribunal held that the provisions of Note 6 were inapplicable, as BTS/BSC sites are immovable property. 5. Marketability and Classification as 'Goods': The Tribunal cited the Supreme Court's decision in Triveni Engineering & India Ltd., which emphasized that goods must be marketable to be subject to excise duty. BTS/BSC sites are not marketable as they cannot be taken to the market as such. Additionally, the installation of BTS/BSC requires user-specific and site-specific licenses from the Department of Telecommunications, making them non-marketable. The Tribunal concluded that BTS/BSC sites are neither marketable nor capable of being marketed. 6. Eligibility for Benefit under Notification 67/95-C.E.: The Tribunal did not delve into the alternative plea of eligibility for benefit under Notification 67/95-C.E. as capital goods, as it found no duty demand could be effected in this case due to the non-excisability of BTS/BSC sites. 7. Consideration of Time Bar and Interest: The Tribunal did not address the issues of time bar and interest, as it found that no duty demand could be made on BTS/BSC sites, which are not excisable. Conclusion: The Tribunal set aside the orders of the Commissioner, finding that the BTS/BSC sites are not excisable as they do not constitute the manufacture of new commercial goods and are not marketable. Consequently, the duty demands, interest, and penalties were also set aside. All appeals were allowed.
|
