1990 (1) TMI 193 - AT - Central Excise

Summary

Issues Involved:
1. Fabrication and erection of steel work and sheet roofing.
2. Supply and erection of boilers for M/s. Kothari (Madras) Limited.
3. Designing, manufacturing, erecting, and commissioning a steam system for M/s. SAS Chemicals (Madras) Limited.
4. Invocation of the extended time limit for duty demand.

Summary:

Issue 1: Fabrication and erection of steel work and sheet roofing

The appellants executed a contract for M/s. Thirumalai Chemicals Limited, raising an invoice for Rs. 57,253.82 but did not pay Central Excise duty of Rs. 2,862.69. The Assistant Collector held that the premises were a factory and the process involved "manufacture" u/s 2(f) of the Central Excises and Salt Act. This decision was confirmed by the Collector (Appeals). The Tribunal referred to previous decisions, concluding that duty cannot be charged on the steel work and sheet roofing erected at the site, but only on materials cleared from the factory prior to 18-6-1977, which were exempt under Notification No. 54/75-C.E.

Issue 2: Supply and erection of boilers for M/s. Kothari (Madras) Limited

The appellants entered a contract for Rs. 3.6 lakhs, clearing boilers on 30-12-1977 and 2-2-1978, paying duty at 2%. The Assistant Collector held that the entire contract price was dutiable at 5%, resulting in a short payment of Rs. 12,940/-. The Tribunal held that duty is payable on the price of boilers as removed from the factory, excluding post-clearance expenses like transportation and erection charges, but including costs related to drawing and designing.

Issue 3: Designing, manufacturing, erecting, and commissioning a steam system for M/s. SAS Chemicals (Madras) Limited

The appellants declared a value of Rs. 4,25,000/- and paid duty of Rs. 21,250/-, while the Department demanded Rs. 49,680/- on the contract price of Rs. 6,21,000/-. The Assistant Collector included all charges in the assessable value. The Tribunal held that duty is payable on the value of the steam system as cleared from the factory, excluding post-clearance expenses but including costs related to drawing and designing.

Issue 4: Invocation of the extended time limit for duty demand

The show cause notice was issued on 28-8-1980, invoking the five-year limitation u/r 10(1) due to non-disclosure of contracts, amounting to suppression of facts. The Tribunal upheld the invocation of the extended time limit.

Conclusion:

The Tribunal set aside the impugned order and remanded the matter to the Assistant Collector for de novo examination, allowing the appellants to produce evidence and be heard before a final decision.