2001 (9) TMI 355 - AT - Central Excise

Summary

Issues:
Challenge to order confirming duty demand and penalty imposition on steel structurals.

Detailed Analysis:

1. Contractual Work and Manufacturing Process:
- The appellants challenged the order confirming a duty demand on steel structurals and a penalty imposition. The contract involved fabrication and erection of steel cable racks at a power plant site. The appellants provided labor and machinery for the job.
- The Department demanded duty on the fabricated structurals, considering them excisable goods. The adjudicating authority upheld this view and imposed the duty demand and penalty.
- The appellants argued that the work involved simple processes not amounting to manufacturing under the Central Excise Act. They claimed they were hired laborers and not manufacturers. The rate for the work was Rs. 1,600 per M.T., with a dispute on the breakdown between fabrication and erection costs.

2. Manufacturer Status and Duty Valuation:
- The appellants contended they were sub-contractors and not manufacturers. The Department argued that the appellants independently undertook the work, making them manufacturers. The raw materials were supplied by the customer and some consumables by the principal contractor.
- The adjudicating authority correctly found the appellants to be manufacturers. The duty was charged based on the prevailing rate during the contract execution period, as the actual removal date was not specified in the notice.
- The appellants sought exclusion of erection costs from the assessable value and rebate of duty under Section 4(4)(d)(ii) of the Act. They referenced a Tribunal decision for support.

3. Marketability and Remand Decision:
- The Tribunal found the appellants as manufacturers but directed a re-examination of the goods' marketability for excisability. The authority was instructed to assess if erection charges should be excluded from the assessable value and if duty rebate was applicable.
- The authority was also directed to provide a reasonable opportunity for a personal hearing before issuing the final order.

4. Conclusion:
- The Tribunal set aside the original order and allowed the appeal by way of remand for further examination of marketability, assessable value, and duty rebate aspects. The manufacturer status was affirmed, and the authority was directed to conduct a thorough assessment before issuing a final decision.