1990 (4) TMI 159 - AT - Central Excise

Summary

Issues:
Delay in filing supplementary appeal, assessment based on entire contract value, inclusion of bought-out items in dairy plant, classification of erected items as excisable goods, applicability of excise duty on assembled items.

Delay in filing supplementary appeal:
The condonation application was filed to excuse the delay in submitting the supplementary appeal E/142/90-A due to the original single appeal against an order dated 21-9-1981. The delay in filing the supplementary appeal was condoned as the main appeal was timely filed.

Assessment based on entire contract value:
The appeal challenged an order directing assessment based on the entire value of the contract for supply, erection, testing, and dismantling of a dairy plant. The Appellate Collector upheld the inclusion of bought-out items in the dairy plant but excluded the value of Central Excise duty and Sales Tax from the assessable value.

Inclusion of bought-out items in dairy plant:
The consultant for the appellants argued that fixed dairy plant machinery should not be considered excisable goods under the Central Excise Act. Citing legal precedents, the consultant contended that assembling parts at the site does not create new excisable goods and bought-out items already subjected to duty should not be taxed again.

Classification of erected items as excisable goods:
The tribunal found that the appellants' activity of assembling and erecting the dairy plant constituted manufacturing and clearance of various components forming the plant. Referring to legal judgments, including the Supreme Court decision in Tulaman Manufacturers Pvt. Ltd. v. Collector of Central Excise, the tribunal held that the assembly of components into a new commodity amounts to manufacture.

Applicability of excise duty on assembled items:
The tribunal rejected the argument that erecting the dairy plant did not constitute manufacture, emphasizing that the process of assembling components into a new commodity falls within the definition of manufacture under Section 2(f) of the Act. Citing relevant case law, the tribunal upheld the lower authorities' decision to classify the dairy plant as excisable goods under the Central Excise Tariff.

In conclusion, the tribunal dismissed the appeals, finding that the assembly and erection of the dairy plant by the appellants constituted manufacture of excisable goods, in line with legal principles and precedents. The tribunal upheld the lower authorities' decision to assess the dairy plant based on the entire contract value, including bought-out items, and rejected the argument that the erected items should not be subject to excise duty.