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TMI Blog1997 (11) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... gning supply, erection and commissioning of spray/painting systems. The appellants also manufacture certain goods upon which the appellants have been regularly paying excise duty, which position is not in dispute in this appeal. They are in the manufacture of various types of goods and machinery falling under different tariff headings amongst others also manufacture various types of spray paint devices and such devices are either of proto type models or tailor made to suit the requirement of each individual customer. In spray paint devices the appellants manufacture components and at times fabricate them into items known as spray paint booth and put them into market or supply the same to the customers as such. As and when the appellants fabricate the entire booth or system in their factory premises they pay the duty on the value of such fabricated items and whenever they supply only the manufactured part for bringing installed in the erection of the plant at the site of the customer. They cleared such manufactured items by describing them by parts systems of payment of appropriate duty. 3. The appellants state that the said system is fabricated by them in the following manner. Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z, spray paint system which has to be manufactured and supplied by the appellants as per their customers specifications. Whereas the goods under this contracts have been brought out to the customers site after duly manufactured by them in complete form and some other were assembled at customer s site before gathered. This action of supplying the contract into 3 sub-contracts, i.e. one purchase order for manufacturing the items, second one for the brought out items and the third one for erection and commissioning so as to suppress the value and price of the complete subject item. The assessee had paid the duty and component part by suppressing the complete value of spray painting system. The show cause notice was also given to the other appellant K.R.Prasad for supplying the purchase order thereby he actively evaded this excise duty. In Para 13 (b) of the show cause notice the department has stated that the appellants had deliberately suppressed the fact of manufacture complete spray painting system from the department with an intent to evade payment of duty and did not pay the duty on the full value but paid the full duty only on component parts manufactured in the factory. They d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposition coolers where hot painted bodies are cooled down to ambient temperature. (vii) Premier coating plant having spray booths. (viii) Enamel coating plant for final painting. He explained that the paint finishing system as follows : Paint finishing system is a large process plant where many activities like cleaning, phosphating, drying, cooling, electro-deposition - wherever applicable, top coat painting and paint baking takes place. In order to allow all this process to take place, a series of devices have to be assembled and installed at site. These devices further consists of manufactured parts from factories, purchased parts which are sent directly to site and with the help of firmly fixed structural members, these constituents are assembled and installed at customer s premises. Paint Finishing System, as explained earlier, consists of various activities in Pre-treatment Plant, Dry off Oven, Cooler, Electro-deposition Oven, Spray Booths and Paint Baking Ovens. Pre-treatment Plant : Pre-treatment is a process where the cars are thoroughly cleaned for oil and rust. This consists of a number of tanks made up of mild steel and stainless steel in which chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n immovable property and cannot be moved without either gas cutting or excavating from the ground. All such equipments are interconnected by piping and electrically and then the whole system comes into an existence. The movement of car body is by overhead and floor conveyors, the speed of which is controlled by electrical panels. This system as such cannot be marketed unless the land underneath is solded. Spray Booths : Josts was earlier selling only small booths, known as No pump spray booth for which all the materials including bought outs used to be manufactured within the premises, biggest size of which was only 20 i.e. roughly 6 metres. These were marketable as such and were possible to handle and transportation. Josts used to pay excise duty on the full value of such goods. In case of Bharat Earth Movers Limited, the sale was only for a small booth, the size of which was only 4 1/2 metre x 3.6 metre x 3 metre. This was completely manufactured within the premises of the company and hence the full duty was paid. Thus it can be seen from the above that there has been substantial difference between spray painting booth which was supplied earlier and paint finishing sys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case, the Supreme Court in the case of Hyderabad Race Club in 1996 (88) E.L.T. 633 followed the Mittal Engineering case referred to above and held that the Totalizer is not goods as it is embedded to the earth. He also tried to distinguish the judgment of the Supreme Court in the case of A.P. State Electricity Board v. C.C.E. - 1994 (70) E.L.T. 3 (S.C.). In that case the question was a marketability of electrical pole which was embedded to earth. It was argued that in the instant case it is a case of huge structure running into several metres length, breadth and hight unless it is embedded on the earth it cannot function and exigibility to Duty therefore does not arise at all. Both cases are different. As far as the extended period is concerned the ld. Counsel argued that in view of the judgment of Supreme Court in C.C.E. v. Chemphar - 1989 (40) E.L.T. 276 (S.C.) there was no conscious or deliberate withholding of information so as to evade duty intentionally revealed in the Show Cause Notice. 10. As against this Shri Sethna for the department while relying upon the order of the impugned order vehemently attacked the argument of the ld. Counsel for the appellant. He str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Triveni Engg. Works Ltd. - 1996 (88) E.L.T. 238 to buttress the argument viz. excise duty was leviable in turbine and alternator bought out items taken to site and erected by producing Turbo Generator set. It was held in that case, since the items were heavy they have to be fixed with bolts and platform which were embedded to the earth. The basis of the decision is that the turbine and alternator were not embedded in earth but are fixed to foundation by bolts to reduce vibration and disturbance to the coupling arrangement and could be removed by pulling or dismantling the same. Therefore the Tribunal held that the duty was leviable. This case was vehemently relied on by the Counsel for the revenue. 11. In reply to the said argument Shri Sorabjee cited the judgment of Alfa-Laval (India) Ltd. v. C.C.E., Pune - 1997 (71) ECR 412 (Tribunal) wherein the Tribunal held that in respect of the Turnkey Project erection and commissioning in respect of equipment for vanaspati plant where the plant was erected and attached at site by foundation to earth through civil work were not marketable and excisable. 12. Shri Sorabjee further invited our attention to the observation of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises. In view of above facts, it is obvious that the assessee had manufactured certain component parts within their factory premises and certain items had been procured through their job workers as bought out or imported, if necessary. Thereafter, assessee had assembled these items/component parts as complete spray painting system/booth. Assessee has strongly contended that these items do not fall within the meaning of goods in order to attract excise duty liability. They further stated that spray painting system must be bolted to the ground while erecting in order to prevent vibration and active rigidity. They have relied on the judgment of Hon ble Supreme Court in Quality Steel Tubes v. C.C.E. and also cited other case laws. I find that assessee had filed classification lists declaring the subject goods as complete items falling under sub-heading No. 8424.00 of Schedule to Central Excise Tariff Act, 1985. Accordingly, the assessee had manufactured these goods. From the perusal of contract/purchase orders, I find that in the terms of delivery the installation was covered. The subject goods are recognised in the trade as a commercial commodity. These goods have a specific n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of contracts/agreements with various customers, the goods were to be supplied as complete itemwise spray painting system/booth and installed/erected at site. Merely because these items because of their huge size were supplied in parts/piecemeal and reassembled/installed at site, these do not become immovable property. The photographs of the impugned goods, submitted during the proceedings, also confirm the said fact." 14. The Counsel has attacked the findings on the basis of the fact that they have filed classification lists in a proper way as well as the decision of the Supreme Court in Mittal Engineering Co. case. When we compare the nature of the goods as at page 63 of the Paper book we find a huge metal structure which is having elevated side portion which are embedded to earth by means of bolts which are guinted or permanently fixed to earth by concrete. If this is not immovable property what is a immovable property? We have carefully considered the decisions cited by Shri Sethna especially the case of Triveni Engg. Works (supra). In Triveni it was a simple case of certain items which were erected on a platform and it was held that since the items were heavy duty have t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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