1988 (5) TMI 278 - AT - Central Excise

Summary

Issues:
1. Whether the work undertaken by the respondents involves fabrication or only installation.
2. Whether the goods supplied for the construction of immovable property are subject to excise duty.
3. Whether duty is leviable on goods produced or manufactured as part of a comprehensive contract.

Analysis:

Issue 1:
The primary issue in this case is whether the work undertaken by the respondents involves fabrication or only installation. The contract between the parties indicated that fabrication of structurals and roofing with A.C. sheeting was part of the project. The Collector of Central Excise found that the completed project indeed involved both fabrication and erection, as per the terms of the contract. Even though the invoices were raised for part of the work yet to be completed, the material and work connected to it cannot be viewed in isolation but in the context of the entire project. Therefore, the plea that only erection was involved and not chargeable to duty was deemed unacceptable.

Issue 2:
Regarding the contention that the goods supplied for the construction of immovable property should not be subject to excise duty, the Collector referred to the definition of "excisable goods" under the Central Excise Tariff. It was emphasized that excise duty is leviable on goods produced or manufactured, irrespective of whether they are for movable or immovable property. The argument that the AC guttering and down-take pipes were not manufactured by the respondents did not exempt them from duty, as per the provisions of the law.

Issue 3:
The Collector, in his appeal, reiterated the grounds related to fabrication and erection work as per the contract. However, the Tribunal noted that there was no specific evidence presented regarding the nature of the fabrication work done or the emergence of any new products for the levy of excise duty. Referring to a previous order in favor of the same party, the Tribunal concluded that no new goods emerged for excise levy purposes. Therefore, based on the lack of evidence and following the precedent set by the Tribunal, the appeal by the Revenue was dismissed.

In conclusion, the Tribunal upheld that the work undertaken by the respondents involved both fabrication and erection, making it subject to excise duty. Additionally, the goods supplied for the construction of immovable property were deemed liable for excise duty as per the provisions of the law. The lack of evidence regarding the nature of fabrication work and the emergence of new goods led to the dismissal of the Revenue's appeal.