2017 (3) TMI 707 - AT - Central Excise

Manufacture / construction at site - 3.05 KMs away from the site of the flyovers - Benefit of N/N. 3/2001-CE dated 01.03.2001 and 6/2002-CE dated 01.03.2002 - whether the exemption under N/N. 3/2001-CE dated 01.03.2001 and 6/2002-CE dated 01.03.2002 as availed on the goods falling under Heading No. 68.07 manufactured by the respondents at site of construction and used in the construction work is admissible or not? - Held that - the Board Circular No. 456/22/99-CX dated 18.05.1999, was issued to clarify the meaning of the expression site in the N/N. 5/98-CE dated 02.06.1998, in view of difficulties faced in availing the benefit of said exemption - since the said site was mentioned in the regular correspondence between N.H.A.I. and RITES Ltd. and N.H.A.I. and its engineers had full access to the site and it was near the site of construction of fly-over, the requirements of the Board Circular dt. 18.05.1999 are met. - Benefit of exemption allowed. Duty on waste and scrap - Held that - Since the PSC girders and horizontal member of bond rails are held as exempted, the scrap and waste generated during the fabrication of these items have rightly been held as covered by exemption N/N. 85/95-CE dated 13.05.1995 - appeal dismissed - decided against Revenue.

Summary

Issues:
- Whether the exemption under Notification No. 3/2001-CE dated 01.03.2001 and 6/2002-CE dated 01.03.2002, availed on goods manufactured at the site of construction for use in construction work, is admissible.

Analysis:

1. Background of the Case:
The case involved an appeal by the Revenue against an order of the Commissioner (Appeals) Central Excise, Jallandhar, concerning the construction of flyovers on National Highway-1. The dispute arose over the manufacturing and use of Pre-stressed Concrete (PSC) Girders and Horizontal Members of Handrails by the respondents.

2. Revenue's Position:
The Revenue contended that the PSC girders and horizontal members were manufactured about 3.05 KMs away from the flyover site, not falling within the defined 'site' per the contract data. A demand of &8377; 45,76,023/- was raised, leading to an order confirming the duty demand and imposing penalties.

3. Appeal and Commissioner's Decision:
The respondents appealed, and the Commissioner (Appeals) held that the exemption under Notification No. 3/2001-CE and 6/2002-CE was applicable, setting aside the Adjudicating Authority's order. This decision was challenged by the Revenue in the appellate tribunal.

4. Arguments Presented:
The Revenue argued that the 'site' definition as per Board Circular No. 456/22/99-CX was not met, as the manufacturing premises were not specifically allocated in the agreement. Conversely, the respondents emphasized the contract's mention of the casting yard/manufacturing premises and regular correspondence referencing the site office.

5. Tribunal's Findings:
The tribunal analyzed the exemption criteria under Notification No. 3/2001-CE and 6/2002-CE, emphasizing goods manufactured at the construction site for use in construction work. It upheld the Commissioner (Appeals)'s decision, citing the contract's provisions allowing access to manufacturing premises and the correspondence indicating NHAI's awareness and access to the site.

6. Conclusion:
The tribunal found the Commissioner (Appeals)'s decision aligned with the Board Circular's spirit and relevant case laws. It affirmed that the exemption applied to the PSC girders and horizontal members, including the scrap and waste generated during fabrication. Consequently, the appeal by the Revenue was dismissed, upholding the Commissioner (Appeals)'s order.

This detailed analysis outlines the legal dispute, arguments presented, and the tribunal's decision regarding the admissibility of the exemption under the relevant notifications in the context of manufacturing and using construction materials at the designated site.