2008 (12) TMI 344 - AT - Central Excise

Pre-fabricated building- . The respondents undertake fabrication of steel structures and erection at site as per the purchase orders. They cleared certain goods claiming them to be pre-fabricated structures under Chapter Heading 94.06 of Central Excise Tariff Act. However, the Original Authority proposed classification of the goods under Chapter Heading 73.08 of CETA, 1985 classifying them as structural. Proceedings were initiated against the respondents for a demand of duty of Rs.4,46,519/- under Section 11A. However, on adjudication, the Original Authority dropped the proceedings against the respondents with a finding that the pre-engineered building structures fabricated by the assessee, are components of a complete pre-fabricated building system, which when assembled at site bring into existence a pre-fabricated building. Revenue was aggrieved over the order of the Original Authority. Therefore, the Revenue approached the Commissioner (Appeals) for setting aside the order of the Original Authority and to classify the goods under chapter heading 73.08. However, the Commissioner (Appeals) agreed with the decision of the Original Authority and dismissed the Revenue s appeal. Revenue is aggrieved over the impugned order of the Commissioner (Appeals) file appeal. Held that- The Original Authority has very carefully examined the purchase orders of the buyer and he has come to the definite conclusion that the steel structures fabricated by the assessee are all components of a complete building. It is not necessary that all these components should be assembled and then transported. In fact, in terms of Chapter 94.06, even complete buildings unassembled also would come within the category of 94.06. Both the lower authorities have gone through the relevant records and have come to the conclusion that what have been cleared are only prefabricated building structures. In view of this, we do not find any merit in the Revenue s appeal. The goods are rightly classifiable under Chapter 94.06. Thus, we reject Revenue s appeal and uphold the impugned order.

Summary

Issues Involved:
1. Classification of fabricated steel structures under Chapter Heading 94.06 vs. Chapter Heading 73.08 of the Central Excise Tariff Act (CETA).
2. Examination of the nature and description of goods in purchase orders.
3. Consideration of relevant case laws and HSN explanatory notes.

Detailed Analysis:

1. Classification of Fabricated Steel Structures:
The primary issue revolves around the correct classification of the fabricated steel structures. The respondents classified their goods under Chapter Heading 94.06 of CETA, which pertains to pre-fabricated buildings. The Original Authority supported this classification, finding that the pre-engineered building structures fabricated by the respondents are components of a complete pre-fabricated building system, which, when assembled at the site, result in a pre-fabricated building.

The Revenue, however, proposed classification under Chapter Heading 73.08, which includes structures and parts of structures made of iron or steel. They argued that the goods should be classified under this heading because they consist of metal structures that remain in position once assembled.

2. Examination of Purchase Orders:
The Revenue contended that the purchase orders indicated that the goods supplied were "pre-engineered building structures" and not "prefabricated buildings." They pointed out that some orders specifically mentioned "Structural Steel," suggesting that the goods were structural components rather than complete prefabricated buildings.

However, the respondents argued that they supplied specific dimensions of pre-fabricated panels along with necessary accessories that, when assembled at the site, form a building. They cited Chapter Note (4) of Chapter 94, which defines pre-fabricated buildings as components finished in the factory and assembled on-site.

3. Consideration of Case Laws and HSN Explanatory Notes:
The Revenue relied on several case laws to support their classification under Chapter Heading 73.08, including:
- M/s. Amiya Corporation v. CCE, Calcutta-I
- M/s. Sagameshwar Pipe & Steel Traders
- M/s. Arati Steels Ltd. v. Collector
- M/s. Dhariwal Steels Pvt. Ltd. v. CCE, Cal-II

They also referred to the HSN explanatory notes, which describe structures under Chapter Heading 73.08 as metal structures that generally remain in position once assembled.

The respondents, however, cited the decision of the Hon'ble CESTAT, West Zonal Bench, Mumbai in the case of M/s. Beard Sell Ltd. v. CCE, Belpur, which classified similar goods under Chapter 94.06. They argued that the goods they supplied were indeed prefabricated buildings, as evidenced by the detailed purchase orders and the nature of the goods supplied.

Tribunal's Conclusion:
The Tribunal carefully examined the records, including the purchase orders and affidavits. It found that the Original Authority had correctly classified the goods under Chapter Heading 94.06, as the goods supplied were components of prefabricated buildings. The Tribunal noted that even the show cause notice acknowledged that the goods were components of pre-engineered buildings.

The Tribunal dismissed the Revenue's appeal, stating that the goods were rightly classifiable under Chapter Heading 94.06. It upheld the findings of both the Original Authority and the Commissioner (Appeals), concluding that the respondents had supplied prefabricated buildings, not just structural components.

Conclusion:
The Tribunal upheld the classification of the fabricated steel structures under Chapter Heading 94.06 of CETA, dismissing the Revenue's appeal. The goods were determined to be prefabricated buildings, supported by detailed purchase orders and the nature of the goods supplied. The Tribunal's decision was based on a thorough examination of the records and relevant case laws.