2009 (4) TMI 258 - AT - Central Excise

Excisability of Signages which are erected at various petrol bunks of IOC - We find that in the instant case the complete signage is movable and is installed by fixing it on a concrete foundation. These can be detached and shifted to another location without damaging them - Undisputedly signages are capable of being assembled at the premises of the appellants and then transferred to the site of its erection after dismantling the same. The signages do not emerge as an immovable property on assembly or erection. They have base plates of steel with provision to fit them on bolts of the concrete foundation. The signage is fixed to earth. Signage is complete before fixing on the concrete plateform. - we hold that the signages are excisable goods. - As regards the claim of limitation we find that the appellants have undertaken manufacture, supply and erection of signages involving huge value under a contract with IOC without intimating the activity to the Department. No acceptable reason has been advanced by the appellants to support the claim that they had not wilfully suppressed the fact of the impugned activity from the Department. We, therefore, hold that the demand of duty on the signages has been validly made invoking larger period. Penalty imposed in accordance with the provisions of Section 11AC is upheld. penalty however under Rule 173Q of erstwhile CER,1944, is uncalled for.

Issues Involved:
1. Whether the signages erected at various petrol bunks of IOC are exigible to duty.
2. Whether the assessee cleared complete signages in unassembled form to the sites or only sign poles.
3. Whether the signages are movable or immovable property.
4. Classification of the signages under CSH 9405.90.
5. Validity of the demand of duty invoking the larger period.
6. Penalty imposition on Virgo and its Managing Director.

Issue-wise Detailed Analysis:

1. Exigibility to Duty:
The core issue was whether the signages erected at IOC petrol bunks were subject to central excise duty. The Tribunal found that the signages were indeed excisable goods. The Commissioner had classified the signages under CSH 9405.90 and demanded duty along with applicable interest. The Tribunal upheld this classification and duty demand, noting that the signages were movable and could be detached and shifted without damage.

2. Clearance of Complete Signages or Sign Poles:
The Tribunal examined whether Virgo cleared complete signages in unassembled form or only sign poles. The Commissioner concluded that complete signages were assembled at Virgo's premises before being dismantled for transportation. This finding was based on statements from senior engineers of RITES and IOC, as well as various documents such as delivery memos, erection reports, and letters indicating that complete signages were inspected and cleared from Virgo's premises.

3. Movable vs. Immovable Property:
Virgo argued that the signages were immovable property upon erection and thus not exigible. The Tribunal rejected this argument, distinguishing the case from precedents like the Hyderabad Race Club and Triveni Engineering cases. The Tribunal found that the signages were movable as they could be dismantled and reassembled without damage, similar to the paper machines in the Sirpur Paper Mills case.

4. Classification under CSH 9405.90:
The Tribunal upheld the classification of the signages under CSH 9405.90, as the appellants did not challenge this aspect. The classification was based on the fact that the signages had a permanent light source in-built.

5. Validity of Duty Demand Invoking Larger Period:
The Tribunal supported the Commissioner's decision to invoke the extended period for demanding duty, citing that Virgo had not informed the Department about their manufacturing activities. The Tribunal found no acceptable reason to support the claim that there was no willful suppression of facts by Virgo.

6. Penalty Imposition:
The Tribunal upheld the penalty imposed on Virgo under Section 11AC of the Central Excise Act, 1944. However, it found the additional penalty of Rs. 7 lakhs under Rule 173Q unnecessary. For the Managing Director, Shri Mathew Kuncheria, the Tribunal reduced the penalty from Rs. 10 lakhs to Rs. 2 lakhs, acknowledging his role in dealing with excisable goods without paying duty.

Conclusion:
The Tribunal concluded that the signages manufactured and supplied by Virgo were excisable goods, upheld the duty demand, and confirmed the penalties with modifications. The appeals by Virgo and Shri Mathew Kuncheria were partly allowed, with the penalty on the Managing Director reduced to Rs. 2 lakhs.

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