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TMI Blog2001 (1) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of various items of Furniture of a type used in offices, hotels, workshops etc. for which purposes, they entered into contracts with M/s. ITC Ltd. and M/s. ABN AMRO Bank. Vide show cause notice dated 6-6-1996 issued to the said appellant company along with the other two appellants alleging evasion of duty by M/s. INTERSCAPE on the ground that the various Furniture Items manufactured and removed by them to the premises of M/s. ITC Ltd. and M/s. ABN AMRO Bank, were cleared without payment of duty during the periods - 1992-93 to 1995-96. It was alleged in the Notice that the said appellant company, M/s. INTERSCAPE did not obtain any Central Excise Registration or file the Classification List or Price List of the goods and did not follow other statutory procedural requirements of Central Excise law. Accordingly, the Notice proposed to confirm the demand of duty against M/s. INTERSCAPE along with the proposed confiscation of the goods manufactured by them and imposition of penalties. 2A(ii).During the course of adjudication before the Commissioner, the appellant company, M/s. INTERSCAPE took a stand that they were not actually engaged in the manufacture of Furniture, but passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -contractors cannot be held to the hired labours. 3B.Shri N.C. Roychowdhury, learned Senior Advocate along with Shri Prantosh Mookherjee, learned Advocate for the Revenue, on the other hand, drew our attention to the findings of the adjudicating authority as regards the actual manufacturer of the furniture items in question, and submitted that it has been discussed in detail by the adjudicating authority that the appellant company worked through the hired labour, in which case it was the appellants who should be considered as the manufacturer and the hired labour cannot be considered as the manufacturer in terms of Section 2(f) of the Central Excise Act, 1944. Shri Roychowdhury, learned Sr. Advocate also submitted that the case-law relied upon by the learned Advocate for the appellant company, is distinguishable on facts and as such, is not applicable. There is nothing on record to show that the appellant company has given further contract to the sub-contractors who actually carried out the work independently. As such, he prayed for rejecting the said plea of the appellants. 3C.We have considered the submissions made by both sides on this point. It is seen that the main contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is seen that M/s. Interscape is directly concerned for the labour job done at site, and hence it cannot be said that they merely acted as consultants. Further, in this regard, M/s. Interscape's own submission at Paragraph 101 of their reply dated 30-7-1996 to the S.C.N. is quite revealing which I quote below :- "101 : We are basically engaged in the carpentry work through hired labour whom every one comes across in day-to-day life......." On going through the above reasoning of the learned adjudicating authority, we do not find any infirmity in the same. The appellants have not been able to produce any contract entered into by them with their so-called independent contractors. Completion of the job was the sole responsibility of the appellants and the responsibility for organising the movement of the materials was also of the appellants. The wastage etc. was also accountable in the appellants' account. It was the appellant company who was to satisfy their clients, as regards the quality of the work. The loss or profit was to be earned by the appellants; the labour only did the work allotted to them, which was under the supervision and control of the appellants inasmuch as they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket which are cut to give proper shape as per design, in addition wood is panelled and then these are fixed to the wall floor as per requirements with the wooden plugs and screw. I further state that, all the work done as above at various sites were under my control. As soon as the work is done the Architects of the individual client inspected the same and after okay by the said Architect, the wooden furniture items so manufactured were handed over to the clients for use." A reading of the above statement given by Shri Naik, which has not been retracted by him at any stage thereafter, makes the position clear that it was the appellants who were actually the manufacturer engaged in the manufacture of the impugned goods with the hired labour. 3C(ii).Shri Wagley, learned Advocate's reliance on the various case-laws of various judicial authorities, is not appropriate inasmuch as the said decisions are distinguishable from the facts of the present case. In the case of Collector of Central Excise, Baroda v. M.M. Khambhatwala reported in 1996 (84) E.L.T. 161 (SC), the Honourable Supreme Court held that the goods produced by household ladies in their own premises out of the raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be considered as handicrafts entitled to exemption Notification No. 76/86-CE dated 10-2-1986. However, learned Advocate has fairly conceded that the Tribunal's decision in the case of C. C. Ex., New Delhi v. Louis Shoppe reported in 1995 (75) E.L.T. 571 (Tribunal), wherein wooden furniture was held to be handicrafts and thus exempt from duty, was reversed by the Honourable Supreme Court on an appeal filed by the Revenue as reported in 75 E.L.T. 571. However, Shri Wagley, learned Advocate for the appellant company has tried to draw support from the observations made by the Honourable Supreme Court laying down certain criteria for satisfying the characteristics of handicrafts, but has not placed anything on record to show that the Furniture in question was, in fact, handicrafts. Inasmuch as the issue is already decided against the appellants on this score, we do not intend to dwell upon the same in detail and by following the ratio of the Honourable Supreme Court's decision, reject the appellants' plea. 5.The appellants have further argued that the goods in question were made as per the specific designs of their customers and as such, are not marketable. Accordingly, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame into existence before being fixed. Thus, such furnitures were also movable contrary to the noticee's claim. Again, that such furnitures were actually sold is matter of records and, therefore, the noticee's claim that those were not marketable falls through. The photographs submitted by them during these proceedings, when examined in the aforesaid perspective, also strengthens the view that the impugned goods were both movable and marketable. These are of such nature which are to be completed before fixing. It is not of a type of in situ construction. Hence the question of treating these furniture items as non-excisable articles, as per the main noticee, M/s. Interscape's claim, does not arise. Merely because of the fact that the excisable goods or its certain parts are fixed with bolts and nuts or otherwise to the ground or wall would not convert the movable article to immovable." A reading of the above paragraph shows that the so-called Fixed Furniture was first completed by the appellants and then, subsequently fixed either to wall or on the floor. The adjudicating authority has seen the photographs placed by the appellants before him, and has given the finding that the bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese observations, we set aside the impugned Order and remand the matter to the Commissioner for fresh decision on the point of limitation. 9.We also direct the adjudicating authority to consider the appellants' plea that it is the entire value of Contract inclusive of the civil work and the other non-excisable work, which has been taken into consideration for quantification of demand of duty against them and not only the furniture items manufactured by them. 10.Inasmuch as the appeal filed by M/s. INTERSCAPE has been remanded on the point of limitation, the appeals filed by the other two appellants are also remanded for fresh decision by the Commissioner. It may, however, be noted that the grievance of the other two appellants, as duly represented by Dr. Samir Chakraborty and Shri Oripal Kundalia, both Advocates, is that the work-contract given by them was not only in respect of furniture items, but included other works also like POP work, civil work, ceiling work etc. etc. The Commissioner has not gone into all these facts and has imposed a very high redemption fine. We direct the adjudicating authority to look into the said grievances of the appellants, and to decide accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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