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TMI Blog2002 (1) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 M/s. Cethar Vessels Ltd. Tiruchirapalli are15. engaged in the manufacture Boilers and parts/components thereof covered under sub-headings 8402.10 and 8402.90 respectively. Noticee had entered into contract with Noticee No. 2, M/s. Bridgestone ACC Ltd., Pithampur for supply of two boilers. The Noticee No. 1 have manufactured and supplied some parts of the boiler while some other parts essential for the purposes of Boilers were procured from the other suppliers. The various components procured and received at the site of Noticee No. 2 from two sources as discussed above were assembled/erected at the premises of Noticee No. 2. This work of erection/installation and commissioning was also completed by the Noticee No. 1. The allegation in the show cause notice is that the various components following their assembly/erection has resulted into a Boiler of Chapter Heading 8402.10 which is different from the components that have gone into the assembly. Therefore show cause notice under consideration proposes recovery of duty on the boiler manufactured by the Noticee No. 1 at the site of Noticee No. 2. Noticee No. 1 submitted that they undertake contracts for16. erection of Boilers al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral or municipal waste. It was submitted by them that FBCBS are generally cleared in unassembled or disassembled condition by following any or all of the procedures as indicated below :- (a) Supply pressure parts like boiler drum/shell, furnace, economiser, super heater, fluidised bed combustion system comprising of in bed tubes, air box, fluidising air nozzle, fuel feed nozzle, feed line etc. from the factory of the manufacturer. (b) Supply standard bought out items like pumps, fans, motors, valves, cables etc. direct to site from vendors or receive the same at the stores and send it along with the manufactured components to site. (c) Structural which act as support for mounting pressure parts and ducting which act as an enclosure to convey the fuel gas from one heat recovery area to the other, manufactured by sub-contractors and dispatched along with the factory manufactured components to site or direct to the sub- contractors to send these items to site directly or fabricated at site. (d) Carryout civil work necessary to hold the structures and erect these components one by one, provide electric and water connection. With reference to abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut assessment and demand of duty in respect boiler it self, which are different from each other. Therefore contention of the noticee that when assessment under Heading 8402 when goods had left their factory, there cannot again assessment under same heading is not correct. Noticee referring to various decisions has also submitted19. that what emerges at site i.e. boiler is not goods inasmuch as it is immovable and incapable of being marketed and therefore not excisable goods. In this connection, I find that Hon'ble Supreme Court in case of Triveni Engineering Ind. Ltd. v. CCE - 2000 (120) E.L.T. 273, has clearly observed that mobility and marketability has to be ascertained from the facts and circumstances of each case. In the present case Shri Clement V. Sammnat site Engineer of Noticee No. 1, who had supervised erection installation of boiler in his statement dtd. 25-2-98 recorded under Section 14 of the Central Excise Act, 1944 have clearly stated that the boiler was installed on the foundation through foundation bolts. The rest of the accessories, fittings are either bolted or welded and the boiler assembly can be dismantled and removed outside the factory of M/s. Bridgeston ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner if furtherance of the act of Noticee No. 1, is not discharging the duty on boiler, which is liable for confiscation. Therefore, Noticee No. 3 also deserves for penal action under Rule 209A of the Central Excise Rules, 1944." 2.Arguing for the appellants ld. Counsel Shri R. Raghavan and J. Shankarraman submit that they have taken a time to file appeal before this Bench in view of the fact that one of the appellants, i.e. Cethar Vessels Ltd. is located at Trichy. They contend that Cethar Vessels Ltd. had obtained contract for supplying in CKD/SKD condition boilers to Bridgestone ACC India Ltd. and for erection of the boilers at their premises at Indore. They had cleared the same on payment of duty by classifying the components of the boiler and parts/components thereof under sub-headings 8702.10 and 8402.90 respectively. The statement of the Site Engineer Shri Clement V. Samuel on 25-3-98 has clearly stated that the boiler had been installed on foundation through foundation bolts piece by piece and what came into existence was an immovable property. On being dismantled, the boiler loses its original condition and would become a scrap. It will not be in a position to remain as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iveni Engineering Industries Ltd. v. CCE [2000 (120) E.L.T. 273 (S.C.)], it has been laid down that the item on construction should also be movable and marketable and only then, it can be considered as excisable. He contends that the boiler which came into existence was as an immovable property and it loses marketability as it is no longer movable, hence the judgment of the Apex Court in the case of Triveni Engineering Industries Ltd. clearly applies and is not distinguishable. He submits that the Tribunal in the case of Silical Metallurgic Ltd. v. CCE, Cochin [1999 (106) E.L.T. 439] went into the question of erection of electric arc furnace constructed and installed at site and held that the said furnace is an immovable property and incapable of being brought to the market for being bought and sold, hence it cannot be treated as excisable product. 4.Ld. Advocate points out to the papers filed by SDR today which refers to the note filed by Deputy Commissioner, Trichy, the note encloses invoices of the appellant indicating clearly the duty paying nature of the goods supplied by the Cethar Vessels to Bridgestone ACC India Ltd. Therefore, their plea that duty paid boilers and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. and valued at Rs. 2,03,715.76 and rate of duty has been shown as 18%. Further excise invoices have also been filed with regard to the supply of structurals and the details of its weight, value and percentage of duty have also been shown. From the above, the duty paying nature of the boilers sent in SKD/CKD condition is, therefore, not disputed. (b) The fact that the Bridgestone India had placed orders on Cethar Vessels Ltd. for erection of boilers at the site is an admitted position and based on these facts the proceedings have been initiated. (c) It is also not disputed that Board has issued a Circular under Section 37B, particularly for Cethar Vessels only. (d) The question, therefore, is as to whether the erection of boilers at site has brought into existence an immovable property or not ? 8.As can be seen from the extracted portion of the order, the Commissioner has noted the statement of Shri Clement V. Samuel, Site Engineer who has clearly stated that the boiler was installed on the foundation through foundation bolts. What is now required to be seen is as to whether after its erection when the boiler comes into existence ? Whether it is an imm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner in which the Furnace has come into existence has not been disputed by the lower authorities. The construction of the Electric Arc Furnace has taken place simultaneously with the civil work and the foundation has not acted as a base for laying the machinery. The observation of the Commissioner (Appeals) that the foundation has been laid for the purpose of erecting the furnace is not in terms with the facts pleaded by the appellants. He has observed that similar furnace has made by M/s. A.B.B. Ltd. and M/s. Inductotherms (I) Ltd. This aspect of the matter has not been put to the appellants nor there is any evidence that the furnace has come into existence of goods in another factory and being erected in another factory. The facts disclosed that the item has come into existence along with civil work and the same cannot be dismantled and on such dismantling only spare parts are recoverable. The learned Commissioner relied on the judgment in the case of Narne Tulaman Manufacturers Pvt. Ltd. and also in the case of Mittal Engineering Works Pvt. Ltd. reported in 1996 (88) E.L.T. 622 (S.C.). The Hon'ble Supreme Court has distinguished this judgment and observed in Para 8 that in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and observed that marketability was a decisive test for dutiability. It meant that the goods were saleable or suitable for sale. They need not in fact be marketed. They should be capable "of being sold to consumers in the market, as it is without anything more". The case that comes closest to that which we have before us is the case of Quality Steel Tubes (P) Ltd. v. Collector of Central Excise, U.P., 1995 (75) E.L.T. 17 (S.C.) = 1995 (2) S.C.C. 372. The issue was whether "the tube mill and welding head erected and installed by the appellant for manufacture of tubes and pipes out of duty-paid raw material" was assessable to excise duty. The Court observed, having regard to the earlier decisions aforementioned, "The basic test, therefore, of levying duty under the Act is two-fold. One, that any article must be goods and second, that it should be marketable or capable of being brought to the market. Goods which are attached to the earth and thus become immovable and do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought to the market for being bought and sold." It was also said that the "erection and installation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord and referred to above, we are in no doubt that the mono vertical crystalliser has to be assembled, erected and attached to the earth by a foundation at the site of the sugar factory. It is not capable of being sold as it is, without anything more. As was stated by this Court in the case of Quality Steel Tubes (P) Ltd., the erection and installation of a plant is not excisable. To so hold would, impermissibly, bring into the net of excise duty all manner of plants and installations. 10. The Tribunal took an unreasonable view of the evidence. It. was the case of the appellants, not disputed by the Revenue, that mono vertical crystallisers were delivered to the customers in a knocked down condition and had to be assembled and erected at the customers' factory. Such assembly and erection was done either by the appellants or by the customer. Where it was done by the appellants, fabrication materials of the customer were used and the customer sent to the appellants debit notes in regard to their value. Where the assembly and erection was done by the customer, there was no occasion for it to send to the appellants a debit note. The fact that there was no debit note in respect of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Hon'ble Supreme Court held that both the tests were not satisfied in the case of appellant as the tube mill or welding head having been erected and installed in the premises and embedded to earth they ceased to the goods within the meaning of Section 3 of the Act. Observing the contention of the learned Counsel for the Revenue that even if the goods were capable of being brought to the market it would attract levy, the Hon'ble Supreme Court observed that "True, but erection and installation of a plant cannot be held to be excisable goods. If such wide meaning is assigned, it would result in bringing in its ambit structures, erections and installations. That surely would not be in consonance with accepted meaning of excisable goods and its exigibility to duty." 8. Even in the case of Tata Robins Fraser Ltd., the Tribunal held that the completion of the project work as apparently being taken as an assembly of the machinery at site, the project itself being an immovable property cannot be chargeable to duty. 9. Taking into all the facts and circumstances and the manner in which the Electric Arc Furnace has come into existence, the only conclusion arrived at, is that, the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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