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TMI Blog2020 (9) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... ENGINEERING WORKS ORS. [ 2010 (4) TMI 15 - SUPREME COURT ] where it was held that the plants in question were not immovable property so as to be immune from the levy of excise duty. Further the issue involved in the present case is squarely covered by the Division Bench decision of the Delhi Tribunal in the case of M/S V.D. ENGINEERING VERSUS CCE, JABALPUR [ 2018 (6) TMI 863 - CESTAT NEW DELHI ] relied upon by the learned AR wherein identical goods were involved. Though the decision was rendered prior to the decision of this case, the same was not brought to the notice of the Bench at the time of hearing the matter - It was held in the case that Inasmuch as the storage tanks have arisen in the factory of the appellant, the liability for payment of excise duty gets fastened on the appellant. The impugned goods are liable to excise duty and the opinion expressed by the learned Member(Technical) is in accordance with law - In view of the majority decision, Central Excise demand is legally sustainable on merits for the normal period of limitation and the appeals are disposed of as follows: (i) Demands for normal period, is confirmed in both the impugned orders. (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the show-cause notices, no specific allegation of fraud, collusion, willful mis-statement, suppression of facts or violation of provisions of Act and Rules, with an intent to evade payment of duty, has been alleged or evidenced. 4. The specific activities of the appellants are that they purchase steel sheets and bend them into cylindrical structures and at the site attach side sheets to fabricate steel tanks, in which, Oil is stored by the Oil Companies. It is un-disputed that these tanks are being fabricated by the assessee and shifted to the premises of these Oil Companies. The end pieces of the steel tanks and the valves etc., are being attached at site. The cylindrical tank is being fixed on the foundation and is placed below the ground. 5. It is the case of the assessees that no steel tank has come into existence at their premises. It is not complete when it leaves the factory gate. The steel tank comes into existence only at the premises of the buyers of Oil Companies when all parts are welded together. At this place, the steel tanks are fixed to the foundation and are placed under-ground. Therefore, they cease to be the goods because they are attached to the earth. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore, the extended period of limitation is invokable and penalties under Section 11AC are rightly imposable. On merit, he argued that it is now well settled that merely because the goods are attached to the earth, they do not cease to be goods. The goods can always be removed from the earth and sold. There is no force in the contention of the asseessee that tanks do not come into existence in their factory because essential character of the tank is very much present when the tank left the factory. Even if, end piece, valves etc. are attached at the customers premises, the tank can only be said to be an in-complete article when it left the factory which should be classified as complete article for the purpose of levies of Central Excise duty. Even if, the manufacture is undertaken outside the factory premises of the assessee, the Central Excise duty is still payable. Merely because the tank is placed on a foundation and is eventually placed below under-ground, it does not cease to be goods. 10. I have considered the arguments of both sides and perused the records. 11. The first issue is to be decided is whether the tanks fabricated by the assessee are goods and whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcisable goods means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt. Explanation : For the purposes of this clause, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. 11.Entry 8474 in the First Schedule to the Central Excise and Tariff Act, 1985 stipulates the rate at which excise was payable on machinery of the kind enumerated in that Entry which reads : Machinery for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances, in solid (including powder or paste) form; machinery for agglomerating, shaping or moulding solid mineral fuels, ceramic paste, unhardened cements, plastering materials or other mineral products in powder or paste form; machines for forming foundry moulds of sand. 12.It is evident from the above that any machinery which is used for mixing is dutiable. That Asphalt Drum/Hot Mix Plant is a machinery meant for mixing etc. was not disputed before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to excise duty. We shall presently refer to the decisions relied upon by Mr. Bagaria, but before we do so we may briefly refer to the relevant statutory provisions to examine, what would constitute moveable or immoveable property. 15.The expression moveable property has been defined in Section 3(36) of the General Clauses Act, 1897 as under : Section 3(36) : movable property shall mean property of every description, except immovable property. 16.From the above it is manifest that the answer to the question whether the plants in question are movable property, would depend upon whether the same are immovable property. That is because anything that is not immovable property is by this very definition extracted above moveable in nature. 17.Section 3 of the Transfer of Property Act, 1882 does not spell out an exhaustive definition of the expression immovable property . It simply provides that unless there is something repugnant in the subject or context immovable property under the Transfer of Property Act, 1882 does not include standing timber, growing crops or grass. Section 3(26) of the General Clauses Act, 1897, similarly does not provide an exhaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to provide stability to the plant especially because the attachment is not permanent and what is attached can be easily detached from the foundation. So also the attachment of the plant to the foundation at which it rests does not fall in the third category, for an attachment to fall in that category it must be for permanent beneficial enjoyment of that to which the plant is attached. 13. The definition of this term in Section 3 of the Transfer of Property Act may be considered which defines it as follows : attached to the earth means (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings ; or (c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached; From the above, it is evident that the goods in question, namely, tanks, do not fall under the category of immovable property attached to earth as per the above definition but continue to be goods. 14. In view of the above, on merits, I find that the assesses are liable to pay the Central Excise duty. 15. The next question is of invoking extended period of limitation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and I do so and the appeals filed by the assessees are rejected on merit, but demand for extended period of limitation, cannot be sustained. 19. In view of the foregoing, the appeals are disposed of as follows : (i) Demands for normal period, is confirmed in both the impugned orders. (ii) Demands for extended period is set aside. (iii) Cenvat credit is available to the assesses. (iv) The prices received by them may be taken as cum-duty prices and duty calculated accordingly. (v) All penalties are set aside. (vi) Appeals are remanded to the original authority for the limited purpose of computation. SD/ (P.V.SUBBA RAO) Member (Technical) Order per : P. K. Choudhary, Member (J) : 20. After having gone through the order dictated by my Learned brother Shri P. V. Subba Rao, I agree with him as regards the non applicability of extended period of limitation, appellant s entitlement of cum-tax benefit and Cenvat credit on inputs and waiver from imposition of penalty. However, as regard merits of the case, I have a different opinion. Most respectfully, I feel that my learned brother has not gone into the detailed facts and the legal pleadin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying the provisions of Rule 8 read with Rule 11 (i.e. residuary rule providing application of reasonable means) of the Central Excise Valuation Rules, 2000, which have not been invoked in the present case. The Tribunal in Indian Hume Pipe Co. Ltd vs. CCE, Trichy [2015 (321) ELT 460 (Tri-Chennai)], while dealing with the valuation of pipes manufactured by assessee for use in execution of contract awarded by State Water Board for laying down the pipelines, has held that the valuation has to be done on cost construction basis plus 15% / 10%, as applicable during the material period as per Rule 8 read with Rule 11 of the Valuation Rules, which provided that value shall be determined using reasonable means consistent with the principles and general provisions of the Valuation Rules and Section 4(1) of the Act. 24. In the present case, it is not in dispute that the fabricated tanks in cylindrical shape, when they left the assessees factory were incomplete, which is actually the stage where the duty could be levied. The above view is also supported by the decision of the Tribunal in Stumpp, Scheule Somappa Ltd. vs. CCE, Bangalore [2007 (212) ELT 118 (Tri-Bang)], wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants have correctly discharged the duty liability under Rule 8. The Commissioner has given a finding that Rule 7 is applicable to the present case. We shall show how Rule 7 is not applicable. We reproduce Rule 7 herein below...... 25. Further, in the decision of this Tribunal in Otis Elevator Company (India) Ltd vs. CCE, Bangalore [2008 (229) ELT 568 (Tri-Bang)], it was held as under: 9. On a very careful consideration of the entire issue, we find that the main point herein is the valuation of the parts and components cleared from the Jigani factory to the sites of the customers for erection and installation of the lifts. The valuation of the parts and components cleared to the National Service Centre for Annual Maintenance Contract and also for modernization, is involved. The appellant had adopted the valuation based on the cost construction under Rule 8 read with Rule 11 of the Central Excise Valuation Rules. We find that the appellants have actually entered into works contract with various customers for the installation and erection of the lifts. Therefore we are of the view that this contract is an indivisible contract and no sale value of the components cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricated tanks below the ground. Having not invoked the relevant provisions contained in Rule 8 read with Rule 11 of the Valuation Rules, the entire proceedings initiated by the Revenue is liable to be set aside. At this stage, it is important to mention that the Hon ble Supreme Court in the case of CCE, Nagpur vs. Ballarpur Industries Limited [2007 (215) ELT 489 (SC)] has deliberated on the importance of the SCN in the very context of Valuation Rules, the relevant portion is extracted below: 21. Before concluding, we may mention that, in the present case, the second and the third show cause notices are alone remitted. The first show cause notice dated 21-5-1999 is set aside as time-barred. However, it is made clear that Rule 7 of the Valuation Rules, 1975 will not be invoked and applied to the facts of this case as it has not been mentioned in the second and the third show cause notices. It is well settled that the show cause notice is the foundation in the matter of levy and recovery of duty, penalty and interest. If there is no invocation of Rule 7 of the Valuation Rules 1975 in the show cause notice, it would not be open to the Commissioner to invoke the said rule. 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context, the relevant portion of the decision of this Tribunal in Servesham Construction Ltd vs. CCE Jaipur [2004 (171) ELT 204 (Tri- Del)] is reproduced: 6. The Adjudicating Authority has left out two tanks in question which were of the diameter 3.8 Mtr. x height 4.4 Mtr. with capacity of 49.9 Cub. Mtr. each and demanded duty in respect of the same on the ground that these being in smaller in size than the other ten tanks, could be removed, transported and installed anywhere. But the authority has lost sight of the fact that these tanks along with other ten tanks were fabricated by same process and embedded to earth permanently. These could not be removed from the earth without dismantling. The benefit of Board Circular dated 15-1-2002 allowing exemption from duty liability to the tanks made and capable for storage of petroleum products in oil refineries or installation at the site and being not able to move without dismantling, could not be denied to these two tanks in question. These tanks had been fabricated for storage of raw naphtha, urea, etc. along with other ten tanks. The ratio of law laid down in M/s. Triveni Industries v. CCE [2000 (120) E.L.T. 273 (S.C.)] and M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessees appeals were partly allowed by way of remand for computation purpose and the Department s appeal bearing Ex. Appeal no. 206 of 2010 filed against allowing the benefit of cum-duty was rejected. In view of the legal position discussed in the foregoing paragraphs, I am of the view that the Tribunal is duty bound to follow the same, as also to ensure consistency on applicability of taxation, and hold that the duty is legally not payable in the instant case. 32. I would like to visit the obvious question that arises, as to whether the order pronounced in Open Court can be recalled and subsequently, a different decision altogether can be rendered by the Tribunal. In this regard, it is pertinent to refer to the decision of the Income Tax Appellate Tribunal in the case of Kamaljit Singh vs. Income Tax Officer, Bathinda [[2019] 106 taxmann.com 251 (Amritsar Trib.)], wherein the Tribunal relying on the Supreme Court decision in Kaushalbhai Ratanbhai Rohit vs. State of Gujarat, held that the Court could recall its order and change its mind even if the draft copy is signed and order is dictated in the open Court. The relevant portion of the decision is quoted below: 3.1 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence of opinion. Before I proceed to discuss the relevant findings rendered by each learned Member, it is pertinent to reproduce the difference of opinion between the two learned Members, which is reproduced herein below: Whether central excise demand is legally sustainable on merits for the normal period of limitation as held by the learned Member(Technical) or the entire demand is unsustainable on merits as held by the learned Member(Judicial)? 35. Before proceeding further, it is necessary to examine the facts of the case and submissions of the parties, which are as under:- 35.1. Excise Appeal No.494 of 2009, is filed by the assessee, M/s H.S. Builders against confirmation of demand of ₹ 5.26,615/- and imposition of penalty of an equal amount. Excise Appeal No.148 of 2010 is filed by M/s Gurmit Construction against the demand of duty of ₹ 19.41,722/- and imposition of equal amount of penalty by the original authority, which has been remanded by the first appellate authority for re-computation after taking the price collected by the appellant as cum-duty price. Ex. Appeal No.206 of 2010 is filed by the Revenue against the first appellate authority giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises, they are incomplete and cannot be called as steel tank at all. Therefore, they are not liable to pay Excise duty at all and have not taken Central Excise Registration nor have they paid Central Excise duty. 35.5. The Ld.Counsel for the assessees also argued that the show-cause notices specifically lack either an allegation or any evidence of fraud, collusion, wilful misstatement or suppression of facts or violation of any provisions of the Act or Rules with an intent to evade payment of duty. Although, show-cause notices do not specifically make these allegations that the demand was raised for the extended period of limitation. Therefore, they were never given any opportunity to defend themselves against allegation of elements necessary for invoking extended period of limitation. Therefore, demand has to fail for the extended period of limitation on this ground alone. 35.6. Thirdly, he argued that they had reason to believe that they were not liable to pay Central Excise duty because their tanks were attached to the foundation and placed under-ground. They honestly believed that they do not qualify to be called as goods and therefore, no Central Excise duty was payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside. vi. Appeals are remanded to the original authority for the limited purpose of computation. 36. On the other hand, learned Member(Judicial) agreed with learned Member(Technical) as regards the nonapplicability of extended period of limitation, appellants entitlement of cum-duty benefits and cenvat credit on inputs and waiver from imposition of penalty but on merits, learned Member(Judicial) has held that no central excise duty is payable by the assessee on the impugned goods. Further both the learned Members agreed that Department s appeal needs to be dismissed and the same was dismissed. 37. After considering the submissions of both the parties and perusal of the records, I find that the only issue on which both the learned Members have contrary view is whether the tanks fabricated by the assessee are goods and whether they are liable to Central Excise duty. Learned counsel for the appellant submitted that learned Member(Technical) while upholding the demand for the normal period of limitation has mainly relied upon the decision of the Hon ble Apex Court in the case of CCE, Ahmedabad Vs. Solid Correct Engineering Works [2010(252) ELT 481 (SC)]. He further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not applicable in the present case as the said decision has been passed without considering the statutory provisions of Central Excise Act, Transfer of Property Act, General Clauses Act or Sale of Goods Act as has been elaborately raised by the appellant in the present case. 38. On the other hand, the learned AR submitted that the findings returned by the learned Member(Technical) is perfectly in accordance with law and should be upheld. He further submitted that learned Member(Judicial) has gone beyond the case as set up by the Revenue in the show-cause notice. He further submitted that the valuation of the impugned goods was not the issue at any stage and further even in appellants ground of appeal also, the appellants have not raised this issue and hence setting aside the demand of excise duty even for normal period is not legally sustainable in law. He also submitted that the Division Bench decision of the Delhi Tribunal in the case of V.D. Engineering cited supra has held that storage tanks (impugned goods in the present case) are liable to excise duty as the activity of converting steel sheets into the form of storage tank amounts to manufacture. He also submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g solid mineral fuels, ceramic paste, unhardened cements, plastering materials or other mineral products in powder or paste form; machines for forming foundry moulds of sand. 12. It is evident from the above that any machinery which is used for mixing is dutiable. That Asphalt Drum/Hot Mix Plant is a machinery meant for mixing etc. was not disputed before us. It was fairly conceded by Mr. Bagaria that assembling, installation and commissioning of Asphalt Drum/Hot Mix Plants amounted to manufacture inasmuch as the plant that eventually came into existence was a new product with a distinct name, character and use different from what went into its manufacture. Super added to the above is the fact that Section 2(f) of the Central Excise Act does not define the term manufacture exhaustively. The definition is inclusive in nature and has been understood to mean bringing into existence a new product with a distinct name, character and use. (See (i) Union of India V. Delhi Cloth and General Mills Co. Ltd. (1977) 1 ELT 199, (ii) BPL India Ltd. V. CCE (2002) 5 SCC 167, (iii) Sirpur Paper Mills Ltd. V. Collector of Central Excise, Hyderabad (1998 (1) SCC 400). 13. Mr. Bagaria s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot spell out an exhaustive definition of the expression immovable property . It simply provides that unless there is something repugnant in the subject or context `immovable property' under the Transfer of Property Act, 1882 does not include standing timber, growing crops or grass. Section 3(26) of the General Clauses Act, 1897, similarly does not provide an exhaustive definition of the said expression. It reads: Section 3(26) : immovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. 18. It is not the case of the respondents that plants in question are per se immoveable property. What is argued is that they become immovable as they are permanently imbedded in earth in as much as they are fixed to a foundation imbedded in earth no matter only 1= feet deep. That argument needs to be tested on the touch stone of the provisions referred to above. Section 3(26) of the General Clauses Act includes within the definition of the term immovable property things attached to the earth or permanently fastened to anything attached to the earth. The term attached to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduce the relevant findings of the Tribunal recorded in para 6 to 9 and reproduced herein below:- 6. Heard both sides and carefully and perused the record. We have also perused some of the work orders placed by IOCL/ HPCL on the appellant. In terms of such work orders, IOCL/ HPCL would supply steel sheet to the appellant and using them the latter, is required to fabricate the storage tanks of the required capacity and return the manufactured tanks to IOCL/ HPCL. From the nature of the work in the appellant s factory, it is evident that the appellant has undertaken the activity of manufacture i.e. activity of converting steel sheets into the form of storage tanks. Storage tank is commodity which is liable for payment of excise duty under CETH 73090090 of the Central Excise Tariff. Consequently, the liability of excise duty on the tanks fabricated by the appellant is established and hence the same is sustained. 7. Next we deal with the arguments advanced on behalf of the appellant that such storage tanks are embedded to the earth and hence no duty is payable. It also stands argued that tanks are not marketable. We are of the view that liability for excise duty is to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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