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1992 (10) TMI 188 - AT - Central Excise
Issues Involved:
1. Whether the assembly, erection, and commissioning of the "Evaporator J" plant amounts to the manufacture of excisable goods. 2. Whether the demand for duty is barred by limitation. Summary: Issue 1: Manufacture of Excisable Goods The primary issue was whether the assembly, erection, and commissioning of the "Evaporator J" plant at the appellants' site amounted to the manufacture of excisable goods under TI 68 of the Central Excise Tariff. The plant, essential for drying liquid sodium sulfate into a marketable powder form, was constructed over six months and permanently embedded in the ground. The appellants argued that the plant was immovable property and not "goods" under the Central Excises and Salt Act, 1944. They cited several Tribunal decisions supporting the view that site-erected structures do not constitute excisable goods. The Tribunal concurred, noting that the plant did not exist as goods before installation and was permanently attached to the ground, thus not fitting the definition of "goods." Issue 2: Limitation of Duty Demand The appellants contended that the demand for duty was time-barred as the show cause notice was issued on 29-3-1985 for construction completed in January 1984, without alleging suppression or mis-declaration. The Tribunal found merit in this argument, noting that the Department was aware of the plant's construction and had not raised the issue of duty earlier. The Tribunal referenced the Supreme Court's ruling in Chemphar Drugs and Liniments, which requires something more than mere inaction to invoke the extended period of limitation. Consequently, the demand was deemed time-barred. Conclusion: 1. The assembly, erection, and commissioning of the "Evaporator J" plant do not amount to the manufacture of excisable goods. 2. The demand for duty is barred by limitation. 3. The penalty imposed by the adjudicating authority is set aside. The appeal was allowed with consequential relief to the appellants, and the cross-objection abated.
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