2000 (5) TMI 303 - AT - Central Excise

Summary

Issues:
Appeal against Order-in-Original confirming duty amount and imposing a penalty based on the emergence of an excisable product after installation of weigh bridges in CKD condition.

Analysis:
The dispute in this case revolved around the emergence of an excisable product at the appellants' site after they installed weigh bridges supplied in CKD condition by M/s. Avery. The Additional Collector of Central Excise had confirmed a duty amount and imposed a penalty, which led to the appeal. The appellant argued that duty had already been paid by M/s. Avery on the weigh bridge in CKD condition, and the duty assessed again post-installation was unjustified. The Chartered Accountant representing the appellant cited various judgments, including the decision of the Hon'ble Supreme Court in the case of Thermax v. CCE, to support the argument that mere erection and commissioning of the weigh bridge should not lead to the emergence of a new excisable product. The appellant contended that the weigh bridge was already a complete product in SKD condition when cleared by M/s. Avery, and the subsequent erection did not change its nature.

The Respondent, represented by the Departmental Representative, reiterated the order impugned, emphasizing that the weigh bridge was not functional at the point of clearance and only became operational after testing, certification by the State Govt., and commissioning. The Respondent relied on the decision of the Hon'ble Apex Court in the case of Narne Tulaman Manufacturers (P) Ltd. to support the position that the completion of the product included certification by the State Govt. regarding the accuracy of the weigh bridge.

Upon careful consideration of the arguments and records, the Tribunal referred to various judgments, including Mittal Engineering Works (P) Ltd. v. CCE, Quality Steel Tubes (P) Ltd., PSI Data Systems Ltd., and Thermax Ltd. The Tribunal noted that the weigh bridge was assessed for duty as a complete product by M/s. Avery India in SKD condition, and the mere erection and commissioning at the appellants' premises did not transform it into a new excisable product. Citing the consistent interpretation of the Hon'ble Apex Court regarding the non-excisability of erection and commissioning of plants, including weigh bridges, the Tribunal set aside the order impugned and allowed the appeal with consequential relief, in line with the established legal principles.

In conclusion, the judgment clarified that the emergence of an excisable product post-installation of weigh bridges in CKD condition did not warrant the assessment of duty again, as the product was already complete when cleared by the supplier. The Tribunal's decision was based on the application of relevant legal precedents and the interpretation of excisability concerning the erection and commissioning of industrial equipment.