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TMI Blog2001 (12) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... oprietorship concern [hereinafter referred to as 'the coloniser']. The coloniser entered into a contract with Ghaziabad Development Authority [in short, GDA] for construction of houses. Some, if not all, of the steel structures required for the contracted work were fabricated and supplied on job work basis to the coloniser by M/s Shri Ram Industries [in short, M/s SRI]. From the results of investigations conducted by Central Excise officers in March 1994 and thereafter, it appeared to the department that M/s SRI had fabricated steel structures (classifiable under CET Chapter Sub-Heading 7308.90) for the coloniser against payment of job charges by the latter; that they suppressed this fact before the department by not approaching it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove Orders (a) and (b) which constitute the operative part of the Commissioner's Order-in-Original No. 11/98 dated 29.9.98. 2. We have examined the records and heard both sides. 3. The adjudicating authority found, on the basis of circumstantial evidence, that SRI was a part of the coloniser's establishment and clandestinely manufactured the entire steel structures required by the coloniser for execution of the contract. It found that S. Krishna had purchased raw material in the name of the coloniser and used the same in manufacturing activity in the name of SRI. It found that M/s SRI and the coloniser concealed the manufacturing activity from the department with intent to maximize profit. It also found that they suppr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges for the same. SRI did not perform any manufacturing activity to be excised. Even assuming to the contrary, the amount of ₹ 3,56,48,346/- included cost of civil/masonry and other works in addition to the cost of fabrication and, if the cost of fabrication work, i.e. cost of raw material plus job charges, were alone taken as assessable value, it would have been below the exemption limit provided under Notification No. 175/86- CE, leaving no room for demand of any duty. Further, the department's assessable value related to a period prior to 28.2.93, the date of Notification No. 1/93-CE mentioned in the SCN. Therefore the allegation that SRI had intent to evade payment of duty by wrongly availing exemption under Notification 1/93- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . K-Building System (Pvt.) Ltd. could be involved as associate builders in the execution of the house-building contract. It further clarified that the associate builders would have no locus standi vis-a-vis the GDA under the agreement . Therefore, Clause (21) ibid did not call for such an inference as drawn by the Commissioner. If he could infer 'oneness' of SRI and the coloniser and raise a demand of duty on the former, why spare the other associate builder viz. K. Building System (Pvt.) Ltd.? SRI was a partnership firm registered as SSI unit with the Directorate of Industries. They had also CE licence, which they surrendered after winding up manufacturing activities. They had surrendered the licence long before the period (not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-workers including them. When the DR was queried as to whether the adjudicating authority had made any enquiry with the other 13 job-workers, his answer was in the negative. Therefore, the demand raised against M/s SRI will be set aside as perverse. No demand of duty can be raised on the basis of circumstantial evidence. It should be founded on clinching evidence sustainable in law as mandated by the provisions of the Central Excise Act read with Article 265 of the Constitution of India. 5.2. Before confirming demand of duty against SRI, the adjudicating authority ought to have settled the issue of excisability of the columns and beams fabricated by them as also the question as to who was the manufacturer. This was not done by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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