9911796707
TMI Blog1998 (8) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3,55,81,610.71 paise against the petitioners and imposed a penalty of Rs. 10 lacs, further directing that interest @ 18.5% would accrue on the amount of excise duty and penalty if that amount remained unpaid after one month from the date of receipt of the order. 2. The order passed by the Collector was appealable under Section 35B of the Central Excise Act but the petitioner chose to come directly to this Court trying to take advantage of the fact that the matter had earlier come to this Court (at the petitioner s instance) when it was still at the stage of notice and enquiry. At that stage this Court declined to interfere in the matter holding that the questions raised by the petitioner required further enquiry and disposed of the writ petition directing the Collector to give all opportunities to the petitioner to bring on record materials, including expert opinion, in support of the case that no excisable goods came into being at any stage in the setting up of Sinter Plant No. 2. Later, when the impugned order was passed, the petitioner filed this writ petition directly before this Court taking the plea that the Collector had passed the order in violation of the directions gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to its contractors on site, duty paid materials, such as iron and steel plates, angles, channels, girders etc. from which the contractors forged the different structural materials, fixtures and devices assigned to them under their respective contracts as per the specified designs, to be used in the setting up of the plant. 5. While the work was in progress, the Superintendent, Central Excise in course of his visit to the petitioner s works noticed the aforementioned structural materials, fixtures and devices and thought that those goods could be subjected to excise duty under sub-heading 7308.90 (residuary head for structures of Iron and Steel) of the Central Tariff Act, 1965. He accordingly wrote a letter to the petitioner company on 16-1-1988. By the said letter, the Superintendent directed the Company and its three contractors, namely, M/s. Tata Robins Frazer, M/s. Bal Krishna and Company and M/s. Shaporejee Palonjee Pvt. Limited not to remove those `manufactured goods until further orders. He also restrained the petitioner company from supplying further materials to its contractors for fabrication of more such goods and prohibited the contractors from carrying any of those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by them as noticed hereinabove. Respondent No. 2 shall give all opportunities to the petitioners to bring on record materials including expert opinion in support of their cases. In view of the fact that the tariff advise as contained in Annexure-12 which was followed by trade notice as contained in Annexure-11 were without jurisdiction, we quash the same. The assessing officer on the basis of the materials on record must give reasons in the event he holds that the activities of the contractors amount to manufacture of goods within the meaning of the Act so that the order can be tested in a Court of law. We have refrained from giving any finding on merit with regard to the other questions involved and raised in these cases." 7. Following the aforesaid judgment of this Court the petitioner company on 16-6-1989 filed its reply to the show cause notice dated 18-7-1988 issued by the Deputy Collector and tried to substantiate its reply by filing what was described as the expert opinion of its General Manager (Engineering) on 27-6-1989. 8. The Collector, Central Excise then issued another show cause notice dated 4-12-1989 in which a description was given of the specific items b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought and sold. The structural steel work which was fabricated for setting up the plant was commercially as unknown commodity and no excise duty could, therefore, be levied on those articles. 13. Mr. Sinha next submitted that no manufacturing process was involved in forging the articles sought to be subjected to excise and the fabrication activity undertaken by the contractors amounted to no more than modifying, sizing, shaping and fitting duty paid iron and steel materials supplied by the petitioner company for erection/setting up of the Sinter Plant. At no stage in the installation of the Plant the duty paid materials supplied by the petitioner such as plates, bars, angles, channels etc. underwent any manufacturing activity within the meaning of Section 2(f) of the Central Excise Act. 14. These were in brief the petitioner s submissions on the issue of the articles in question being eligible to excise duty. 15. Apart from resisting the demand of the Revenue on merits, it was submitted that the demand had become barred by time in terms of Section 11A and it was, therefore, no longer open to the Revenue to raise the impugned demand. 16. It was further submitted that even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Sirpur Paper Mills Limited v. Collector of Central Excise, Hydrabad. - 1998 (97) E.L.T. 3. The other decisions relied upon by the Revenue are as follows : (i) Decision by the Supreme Court in Narne Tulaman Manufacturers Pvt. Ltd. v. Collector of Central Excise - 1988 (38) E.L.T. 566. (ii) Decision by Patna High Court in Tata Iron and Steel Company Limited v. Union of India - 1988 (33) E.L.T. 297. (iii) Decision by Bombay High Court in Kirloskar Brothers Limited v. Union of India and others - 1988 (34) E.L.T. 30. (iv) Decision by CEGAT in Collector of Central Excise v. Indoprint Enterprises - 1988 (36) E.L.T. 513. (v) Decision by CEGAT in Bhartia Electric Steel Company Limited v. Collector of Central Excise - 1988 (38) E.L.T. 169. 20. I have briefly recorded the submissions made on behalf of the parties and the decisions relied upon in support of their respective submissions for the sake of the record but I do not propose to examine those submissions in any greater detail. I also do not propose to make any pronouncement on the disputed issue concerning the leviability of excise duty on the articles in question. This is because I find that the impugned order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on into the question of movables and immovables. If it was the object of the Collector to make the Sinter Plant itself the subject of excise duty and to that and he was making the proposition that immovables were equally amenable to the levy of excise, the proposition is incorrect and contrary to the law long established on the basis of a number of Supreme Court decisions. It may here be noted that even in the case of Sirpur Paper Mills Ltd. (supra), on which great reliance was placed by the Revenue it was never said that an immovable property was equally covered by the charging section of the Central Excise Act but it was found and held that the Paper making machine which was assembled and erected by the manufacturer at its factory site was not an immovable property as something attached to earth like a building or a tree. 22. On the other hand if the Collector was proceeding to levy excise on the structural materials, fixtures and devices which came into being at the intermediate stage and went into the making of the Sinter Plant the entire question of movable and immovable was without any purpose because it is no one s case that those articles were not movables. All that is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also in person who engage in their production or manufactures on his own account. M/s. TISCO has not only supplied the raw materials but they have supplied consumables etc. and also drawing and design of the plants. In view of this I hold that the contractors were not working under M/s. TISCO and hence they are not independent manufacturer of Sinter Plant No. 2 and R.M.B.B.S. [Emphasis added] 27. These are only some of the errors in the impugned judgment which I have referred to above. 28. For the reasons discussed above, I find and hold that the impugned order dated 22-11-1990 passed by the Collector, Central Excise, Patna, as contained in Annexure-1 is unsustainable and is fit to be set aside. I accordingly set aside the impugned order. The matter is remitted to the Collector to pass a fresh order, after hearing the petitioner, in accordance with law and in the light of the observations made in this judgment. 29. It has been indicated above that we did not send this case to the appellate authority on account of its long pendency in this Court. We, therefore, wish to make it clear that in the event any party, the petitioner or the Revenue, is aggrieved by the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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