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TMI Blog2004 (8) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... counters, etc. At the outset, he mentioned that the Appellants are not contesting the amount of Rs. 77,500/- in respect of M/s. Bharat Soka Gakkai and out of Rs. 38,23,693/-, in respect of M/s. Ericsson, the Appellants are contesting only in respect of Rs. 22.40 lakh. Accordingly, the duty of Rs. 77,500/- and balance amount in the case of Ericsson is to be discharged by the Appellants and is upheld. 2.2 The learned Advocate submitted that the job of making of the wooden furniture and for undertaking interior decoration at site is highly professionalised job essentially undertaken by the craftsman by skilful use of hands by such workers; that such craftsman, by use of hand tools, convert the pieces of the wood to be parts of the wooden furniture and it is at this stage that the process of ornamentation by way of in-lay work/carving by skilful use of hands is undertaken by the craftsman; that thus the article of wooden furniture essentially comes out by hand made process and since such goods in its essential form comes out by the hand-made process, they fall under the term 'handicraft' that handicrafts are totally exempt from payment of Central Excise duty under Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quire use of mouldings of wood; that such mouldings are thin and are made at site by manual process; that it is not economically viable to manufacture the mouldings in the factory and send the same to the site located in different parts of the country for the reason that they are likely to get damaged during transportation and further the correct dimension in length can only be adjudged by looking to the place where the same have to be used; that, therefore, such mouldings are invariably made by the workers manually at site and attract nil rate of duty under sub-heading No. 4405.10 of the Schedule to the Central Excise Tariff Act. He referred to the certificate given by Shri Ashok Nanda of M/s. Structural Engineering Consultants and Shri Sanjay Batra of EIH Ltd. wherein it is mentioned that the Appellants had fabricated mouldings and skirtings manually without the aid of power; that there is absolutely no evidence placed on record either at the stage of issuance of show cause notice or in the impugned Order to show that power has been used in the manufacture of mouldings. He mentioned that they had produced the invoices before the Adjudicating Authority showing that logs were sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that if duty is held to be payable by them as confirmed by the Commissioner, sale price should be considered as the cum-duty price and abatement towards the same should be allowed as held by the Larger Bench of the Tribunal in the case of Srichakra Tyres Ltd. v. C.C.E., 1999 (108) E.L.T. 361 (T) = 1999 (32) RLT 1 (CEGAT-LB) and by the Supreme Court in the case of Maruti Udyog Ltd. 2002 (141) E.L.T. 3 (S.C.) Finally, he mentioned that as they have not contravened any provisions of the Central Excise Act and Rules, no penalty is imposable on them; that in any case the penalty imposed is very harsh and needs to be modified and reduced; that no penalty is also imposable on Shri Arun Vadehra, Managing Director and Shri Naresh Khurana, employee of Appellant No. 1 as they were under the bona fide belief that the impugned goods were not liable to pay any duty; that there is nothing to show that they had any knowledge that the goods were liable for confiscation that interest, if any chargeable, should be charged at the rate prevalent at the relevant time and not at the rate of 24%; that the rate of interest has been varying from time to time. 6.1 Countering the arguments, Shri Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a of M/s. Structural Engineering Consultants in his cross-examination has deposed that he does not know "whether the mouldings were purchased from the market or brought from the factory of M/s. Vadehra Furnishers" and "that there was no restriction of using power by M/s. Vadehra Furnishers" and that their "job was to certify their quality of work and their bills" and that the mouldings "were brought as it is and finishing was given at site". The learned SDR contended that in view of the said position, he cannot certify that mouldings and skirtings were fabricated manually. He also mentioned that Shri Sanjay Batra, Vice-President of EIH Ltd. has deposed in his cross-examination in answer to question No. 5 "Do you supervise the construction" as follows "Not directly, priodically I visit site"; that he also deposed that he would not confirm whether the wood for moulding brought at site was cut to size or not. The learned SDR contended that Mr. Batra is also an interested party and as such certificate given by him cannot be relied upon. Regarding Bills brought on record for sending the labour to Kerala, the learned SDR submitted that no correlation has been established by the learned A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first issue to be decided is whether the products made by the Appellants are handicrafts as claimed by them or furniture only. The Supreme Court has laid two-fold test to determine as to whether the product can be categorised as handicraft. One of the tests is that the product must be graced with visual appeal in the nature of ornamentation or in-lay work or some similar work lending it an element of artistic improvement. According to this test, the ornamentation must be of substantial nature. The learned Advocate has emphasised that as per the Order received by them from M/s. Ericsson Communication Pvt. Ltd., veneers were to be placed in geometric pattern and they were to be finished with in-lays mahogany/teakwood cedar and lippings and mouldings of teakwood. The learned Advocate has also produced photographs of the furniture in question. The Commissioner, in the impugned Order has given a specific finding that there is no ornamentation and in-lay work done in furniture did not make it an element of artistic improvement. Nothing has been brought on record by the Appellants to prove compliance with the second test laid down by the Supreme Court for categorising any product as hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in the manufacture of mouldings and skirtings, duty is chargeable. In the case of Standard Fire Works Industries (supra), the Supreme Court has held that the power has been used in the manufacture of fire works when the Appellants had sent the steel wire to the job worker for cutting and the cutting was done with the aid of power. Accordingly, we hold that the Central Excise duty is payable on mouldings and skirtings. It has been contended by the learned Advocate that the duty has also been demanded on repair work undertaken by them. In respect of Bill dated 7-7-97 issued to M/s. American Express for making of partition and overheads for Rs. 22,000/-, the learned Advocate has not contested the bill. In view of this, we hold that the duty is payable by them in respect of the said bill. However, in respect of Bill dated 12-7-96 issued to M/s. American Express for Rs. 2.03 lakh, we agree with the learned Advocate that the bill was on account of repairing the filing racks. It is seen from the relevant purchase order that the work undertaken by the Appellants was for increasing width from I4" to 16" which does not amount to manufacture as no new identical product comes into existe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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