1989 (10) TMI 130 - AT - Central Excise

Summary

Issues Involved:
1. Liability to pay duty on the full value of contract orders.
2. Duty liability for goods fabricated on a job basis through other units.
3. Proper jurisdiction for action on alleged duty evasion.
4. Limitation period for demand of duty.

Summary:

1. Liability to Pay Duty on Full Value of Contract Orders:
The appellants, M/s. Tata Robins Fraser Ltd., were alleged to have evaded duty by not discharging their duty liability fully on goods manufactured and assembled at site. The adjudicating authority found that machinery items appeared to have been manufactured at site from components obtained from the appellants' works and the market. The authority held that the duty liability for goods manufactured at site should be determined independently of the duty already paid on the components. The appellants contended that no new product was manufactured at site and that the project as a whole is not excisable goods. The Tribunal agreed with the appellants, stating that the completion of the project did not bring into existence any goods but rather immovable property, which is not liable to excise duty.

2. Duty Liability for Goods Fabricated on Job Basis:
The adjudicating authority found that the appellants were the real manufacturers of fabricated structurals and other articles got fabricated from others. The appellants argued that the independent contractors were the manufacturers of goods in their own right. The Tribunal agreed with the appellants, citing a series of judgments supporting the view that the independent contractors were not mere agents or dummy units of the appellants. The Tribunal disagreed with the Collector's interpretation and held that the appellants were not liable for duty on goods fabricated by independent contractors.

3. Proper Jurisdiction for Action on Alleged Duty Evasion:
The Collector decided in favor of the appellants, holding that the proper officer to take action on alleged duty evasion is the officer in whose jurisdiction the site of manufacture is located. This issue was not contested further.

4. Limitation Period for Demand of Duty:
The appellants argued that the demand for duty beyond six months prior to the show cause notice was time-barred. The Collector held that the appellants had suppressed facts to evade duty, justifying the extended limitation period. The Tribunal, however, found that the classification lists and R.T. 12 returns did not indicate any concealment or misstatement. Despite this, the Tribunal concluded that no duty liability arose against the appellants on the merits of the case, rendering the limitation issue moot.

Conclusion:
The appeal was allowed with consequential relief to the appellants, as the Tribunal found no liability of duty on the goods manufactured and cleared by the appellants.