1987 (9) TMI 259 - AT - Central Excise

Summary

Issues:
Classification of 'turnkey projects' involving fabrication and erection activities, liability to duty under the Central Excise Act, interpretation of 'goods' and 'immovable property' in the context of Central Excise duty.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi arose from a dispute regarding the classification of a contract for construction activities and the liability to duty under the Central Excise Act. The respondents had entered into a contract for the construction of various structures and had raised invoices for roofing and foundation bolts. A show cause notice was issued, demanding duty on certain goods used in the fabrication process. The Assistant Collector held the goods liable to duty under T.1.68, but the Appellate authority allowed the appeal.

The key argument presented by the Appellant was that the A.C. Sheeting and foundation bolts were liable to duty, contrary to the Appellate authority's decision. The Appellant contended that the Sale of Goods Act's definition of goods would not apply to the term 'excisable goods' under the Central Excise Act. On the other hand, the Respondent's Consultant argued that the contract involved fabrication and erection activities, citing a previous Tribunal decision in a similar case.

The Tribunal delved into the issue of classifying 'turnkey projects' involving fabrication and erection activities. Referring to a previous ruling, the Tribunal emphasized that the contract primarily entailed construction and completion works, not the sale of raw materials. It was established that fabrication structures did not constitute 'movable properties' attracting Central Excise duty. The Tribunal noted that the A.C. Sheeting and Foundation Bolts used in the fabrication were already duty paid. Consequently, it was held that there was no manufacture involved, and thus, no liability to duty arose in this case.

Furthermore, the Tribunal addressed the argument that the Central Excise Act did not exclude immovable property from the definition of goods. It clarified that while the Act defines 'excisable goods,' the term 'goods' itself remains undefined. By examining the definitions of 'movable property' and 'immovable property' under the General Clauses Act, the Tribunal concluded that immovable property could not be treated as goods. As the fabricated structures were not articles typically bought and sold in the market, they fell outside the scope of 'goods.' Consequently, the appeal was dismissed, and as no relief was sought in the cross objections, the matter was closed.