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TMI Blog1999 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals relates to erection of coal handling plant. 3-5. Appeal Nos. E/1039 to 1041/90-B1. In these appeals of M/s. R.K. Khade Patil and others duty demand is on construction of new factory building, general stores and sugar godowns. 6-7. Appeal Nos. E/138/90-B1 and E/2145/90-B1 of M/s. Gannon Dunkerley and Co. Ltd. relate to duty demand on civil contracts for the construction of captive power plant at Bhatinda for the National Fertilisers Ltd. and construction work for Associated Bearing Co. Ltd. 8. Appeal Nos. E/62/92-B1 of M/s. Man Structures Ltd. The duty demand is on preparation of parts of Electricity Towers and Latis Mast. 9-10. Appeal Nos. E/485/91-B1 and E/1923/91-B1. In these appeals of M/s. Jai Parabolic Springs Ltd., and Shri Kewal Singh, the demand of duty is on the setting up of factory shed. 11. E/4514/91-B1. In this appeal of M/s. Punjab Chemi-Plants Ltd., the work involved was the civil work for Rail Coach Factory. 12. Appeal No. E/883/91-B1. This appeal of M/s. Deccan Mechanical and Chemical Industries arises from duty demand on Trestles fabricated for civil construction. 13. Appeal No. E/1244/92-B1. In this appeal of M/s. Elecon Engineering Co. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught and sold in the market by these names. They assume these identities only on their being placed in the building to perform architectural functions of beams, girders, purlins, etc. And once they are placed in the building and structures, they have become part of such buildings and structures which are immovable properties, and ceases to have an identity of their own. The levy has also been resisted on the ground that these items are not brought to the market (to be goods) as girders, purlins, etc. for sale and cannot be so brought also. 4. The appellants have also submitted that the excisability of plants and structures to duty had come up for consideration in several cases before the Supreme Court, High Court and Tribunal and it has been held that immovable structures, plants and structural items are not liable to Central Excise Duty. They have placed reliance mainly on the following judgments :- 1. 1995 (76) E.L.T. 241 (S.C.) - Moti Laminates Pvt. Ltd. v. C.C.E. 2. 1995 (75) E.L.T. 17 (S.C.) - Quality Steel Tubes Pvt. Ltd. v. C.C.E., U.P. 3. 1977 (95) E.L.T. 212 (M.P) - Bajaj Auto Ltd. v. Union of India 4. 1998 (98) E.L.T. 334 (Kar.) = 1977 ECR 4967 (Kar.) (sic) - Tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Gases v. Collector of Central Excise - 1988 (37) E.L.T. 347 (Cal.) 6. It was also submitted that since these products are specifically mentioned in the Tariff and such products come into existence only with some human labour and skill, manufacture has to be presumed. The decision is not to be based on whether the manufacture process was simple or complex. In support of this proposition, they have relied on the following judgments of the Supreme Court :- 1. Empire Industries Ltd. v. U.O.I. - 1985 (20) E.L.T. 179 (S.C.) 2. U.O.I. v. Parle Products - 1994 (74) E.L.T. 492 (S.C.) 3. Collector of Central Exicse, Bombay v. S.D. Fine Chemicals Pvt. Ltd. - 1995 (77) E.L.T. 49 (S.C.) 4. Collector of Central Excise v. Pratap Steel Rolling Mills - 1997 (94) E.L.T. 458 (S.C.) 5. Brake India Ltd. v. Spt. Central Excise - 1998 (101) E.L.T. 141 (S.C.) 6. Decorative Laminates India (P) Ltd. - 1996 (88) E.L.T. 3 (S.C.) (sic) 7. Subhraj Co. v. CCE - 1996 (88) E.L.T. 3 (S.C.) (sic) 8. Standard Fire Work Industries v. CCE - 1987 (28) E.L.T. 56 (S.C.) 9. Laminated Packaging Pvt. Ltd. v. CCE - 1990 (49) E.L.T. 326 (S.C.) 10. Sirpur Paper Mills v. CCE, Hyderabad - 1998 (97) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........................................................................................ The issue was whether the tube mill and welding head erected and installed by the appellant for manufacture of tubes and pipes out of duty-paid raw material" was assessable to excise duty. The Court observed, having regard to the earlier decisions aforementioned, The basic test, therefore, of levying duty under the Act is two-fold. One, that any article must be goods and second, that it should be marketable or capable of being brought to the market. Goods which are attached to the earth and thus become immovable and do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought and sold. It was also said that the erection and installation of a plant cannot be held to be excisable goods. If such wide meaning is assigned it would result in bringing in its ambit structures, erections and installation. That surely would not be in consonance with accepted meaning of excisable goods and its exigibility to duty." 10. The attributes essential to goods have been the subject matter of several judicial pronouncements. The apex court also pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad, 1975 (76) E.L.T. 241 (S.C.) when it observed as under :- 7. The duty of excise being on production and manufacture which means bringing out a new commodity, it is implicit that such goods must be usable, movable, saleable and marketable. The duty is on manufacture or production but the production or manufacture is carried on for taking such goods to the market for sale. The obvious rationale for levying excise duty linking it with production or manufacture is that the goods so produced must be a distinct commodity known as such in common parlance or to the commercial community for purposes of buying and selling. Since the solution that was produced could not be used as such without any further processing or application of heat or pressure, it could not be considered as goods on which any excise duty could be levied. 8. But the learned Additional Solicitor General urged that resin or solution which was produced by the appellant was technically known as resols. Reliance was placed on its meaning in the dictionary. The learned Counsel submitted that the tariff schedule has divided the items into specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar Mills Ltd. Anr. v. U.O.I. and Anr., 1978 (2) E.L.T. (J 336) (S.C.) = AIR 1968 S.C. 922 it was held by this court : The Act charges duty on manufacture of goods. The word `manufacture implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. The duty is levied on goods. As the Act does not define goods, the legislature must be taken to have used that word in its ordinary, dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market. That would be such an article which would attract the Act was brought out in Union of India v. Delhi Cloth and General Mills Ltd., 1977 (1) E.L.T. (J 199) (S.C.) = 1963 Supp. (1) SCR 586 = AIR 1963 S.C. 791". In A.P. State Electricity Board v. Collector of Central Excise, Hyderabad, 1994 (2) SCC 428 this Court reiterated the same principle and observed that marketability was must irrespective of whether it was marketed or not. Reference has already been made to Indian Cable (supra). Thus a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket as such and these must be capable of being sold or being sold in the market as such." The submission of learned Counsel for the Department, therefore, that merely because the intermediate product manufactured by the appellants was resols and it is one of the items mentioned under Item 15A it was exigible to duty ignores the basic and primary test for exigibility of duty. The precise argument advanced by the learned Solicitor General of India was rejected in Bhor Industries (supra) and the order of the Tribunal in that case was set aside as the test of marketability or capable of being marketed , was not applied by the Tribunal." 11. From the aforesaid judgments of the Supreme Court, it is clear that there is no authority in law for levying duty on immovable structures like factory building, power plant, etc. We also find that with regard to specific question of levying Central Excise Duty on structurals, the Madhya Pradesh High Court has held in Union of India v. Bajaj Tempo Ltd., 1995 (80) E.L.T. 774 (M.P.) that erection of sheds at site with the help of various articles of iron and steel is only a fabrication activity and does not amount to manufacture and no new or dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has been explained along with photographs of the plant that it cannot be brought and sold in the market. We observe from the photographs produced during hearings that the plant consists of large civil structures, lengthy conveyor belts and civil structures to support such conveyor belts, called feeders, etc. spread over several hectares of land. It is not a case of machinery and plant being fixed to earth merely for vibration free functioning. They are immovable property. Same is the case with regard to factory buildings and other civil structures involved in the present appeals. The test laid down in the Sirpur Paper judgment was whether the machine can be sold in the market. The coal handling plant cannot be brought and sold in the market and, therefore, is not covered by this decision of the Supreme Court. We also observe that the Tribunal has held in Ludhiana Bottling v. Collector of Central Excise, Chandigarh, 1997 (93) E.L.T. 776 (Tribunal) = 1997 (19) RLT 68 that conveyor system for transmission of crates of aerated water was not excisable as the system was embedded to earth and, therefore was immovable property and not marketable as goods. The coal handling plant and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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