1999 (10) TMI 314 - AT - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the Commissionerate.
2. Determination of the manufacturer.
3. Classification of the industrial fan.
4. Requirement of a factory for manufacturing.
5. Nature of the industrial fan as movable or immovable property.
6. Validity of the duty demand and penalty imposition.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissionerate:
The appellants contended that the Coimbatore Commissionerate did not have jurisdiction over the places where the industrial fans were erected. The Commissionerate conceded this point, acknowledging that the demands could only be raised by the respective Commissioners holding jurisdiction over the buyers' factories. Consequently, the Tribunal held that demands raised outside the jurisdiction of the Coimbatore Commissionerate were unsustainable.

2. Determination of the Manufacturer:
The appellants argued that they were not the manufacturers but merely provided technical supervision, while the actual manufacturing was carried out by the respective textile mills. The Commissioner rejected this claim, relying on the Memorandum of Articles of Association and profit and loss accounts. However, the Tribunal found that the appellants were not involved in the manufacturing process but only provided technical advice. The evidence, including affidavits and certificates from the textile mills, supported the appellants' claim that the mills carried out the manufacturing. Therefore, the Tribunal concluded that the appellants were not the manufacturers, and the demands against them were not sustainable.

3. Classification of the Industrial Fan:
The classification of the industrial fan under Chapter Heading 8414 was not disputed by the appellants. The Commissioner had classified the industrial fan as excisable under Heading No. 8414.00. The Tribunal did not find it necessary to delve into this issue further, as the primary contention was about the appellants' role as manufacturers.

4. Requirement of a Factory for Manufacturing:
The appellants argued that the manufacturing activity must occur in a registered factory. The Commissionerate's report suggested that the buyers' factories where the erection took place could be considered the appellants' factories. The Tribunal disagreed, stating that the appellants did not own or lease the factories and were only providing technical supervision. The Tribunal emphasized that the factory's existence and registration were prerequisites for manufacturing, which was not the case here.

5. Nature of the Industrial Fan as Movable or Immovable Property:
The appellants contended that the industrial fans became part of the immovable property upon erection and could not be considered goods. The Tribunal did not find it necessary to address this issue separately, given its conclusions on the jurisdiction and the appellants' role as manufacturers.

6. Validity of the Duty Demand and Penalty Imposition:
Given the Tribunal's findings that the demands raised outside the jurisdiction were unsustainable and that the appellants were not the manufacturers, it concluded that the duty demand and penalty imposition were invalid. The Tribunal set aside the impugned order and allowed the appeal with consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellants, holding that the demands raised outside the jurisdiction of the Coimbatore Commissionerate were unsustainable and that the appellants were not the manufacturers of the industrial fans. Consequently, the duty demand and penalty imposition were invalid, and the appeal was allowed with consequential relief.