2012 (4) TMI 138 - AT - Central Excise

Classification of Retail visual identity (RVI) Revenue contended classification under chapter heading 9405 6090 assessee contended that erection of RVI at site does not amount to manufacture and the RVI installation cannot be termed as goods as the RVI items come into existence as fixtures on the site and these fixtures cannot be removed without damage and cannot be used at alternative site Held that - Matter is remanded back to the original adjudicating authority for fresh adjudication subject to further deposit of Rs 50 lacs and in the light of following directions - classification of the goods being cleared should be decided first - Excise duty should be demanded only on the goods manufactured and cleared and not on construction activity appellant to submit details of goods manufactured, classification, value and the exemptions claimed

Summary

Issues:
1. Classification of retail visual identity (RVI) under Central Excise Tariff.
2. Whether the erection of RVI amounts to manufacture and attracts excise duty.
3. Applicability of excise duty on goods manufactured and cleared.
4. Reliability of statements recorded during investigation.
5. Justification for the classification adopted.

Analysis:
1. The case involved a dispute regarding the classification of retail visual identity (RVI) under the Central Excise Tariff. The appellants, engaged as contractors for installation of RVI at petrol pumps, contested the demand for excise duty on the grounds that the RVI items were fixed on-site and could not be dismantled without damage. The Revenue argued that the items were manufactured goods classifiable under Tariff Item 94056090, leading to the issuance of a show cause notice demanding excise duty.

2. The main contention raised by the appellants was that the erection of RVI at specific sites did not amount to manufacturing as the components were fixed at existing structures without the creation of movable goods. The process involved fixing installation elements like Canopy Fascia, Building Cladding, and Wall Cladding as per specifications provided by oil companies. The Tribunal noted that the appellants had not paid excise duty for the fabrication of RVI, leading to the dispute over the classification and applicability of excise duty.

3. In a previous case, the Tribunal had outlined guidelines for adjudication proceedings related to similar issues, emphasizing that excise duty should be demanded only on goods manufactured and cleared, not on construction activities. The Tribunal directed the original adjudicating authority to consider the classification of goods, exemptions claimed, and value of goods cleared before determining the revised duty liability. The need for a reasoned and speaking order was highlighted to address all relevant issues comprehensively.

4. The Tribunal found shortcomings in the adjudication order, such as the reliability of statements recorded during investigation not being tested through cross-examination, inadequate justification for the classification adopted, and the demanding of excise duty for construction activities. While acknowledging that some excisable goods were manufactured and cleared, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a fresh adjudication in line with the provided directions. The appellant company was required to deposit a specified amount for the process to proceed.

5. The judgment highlighted the need for a thorough reevaluation of the issues raised, including the reliability of evidence, classification of goods, and justification for excise duty demands. The decision to remand the matter for fresh adjudication aimed to ensure a comprehensive and well-reasoned determination in accordance with the legal principles and guidelines outlined by the Tribunal.