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TMI Blog2003 (3) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ls were also bought locally; that they entered into a labour contract with M/s. Aldowin and Blue Chip Consultants for providing labour for the purpose of assembling panels into frame, erecting glass sheet fixed on to the aluminium frame to the building so as to install the aluminium structural glazing system; that the Commissioner, under the impugned Order, has held that aluminium glass panel have emerged before installation which are marketable and that as per terms and conditions of the contract, Aldowin are the manufacturer liable to pay Central Excise duty; that the Commissioner has classified aluminium glass panel under sub-heading 7610.90 of the Schedule to the Central Excise Tariff Act and besides confirming the demand of duty and imposing penalty on Aldowin, has imposed penalty on BH EL and Shri N.S. Sankaran, General Manager, and Shri J. Roy Franando, Project Manager of M/s. BH EL; that the Commissioner has also confiscated 156 aluminium glass panels with an option to redeem the same on payment of fine of Rs. 17.50 lakhs. 3. The learned Advocate, further, submitted that Aldowin merely supplies labour for the work which inter alia include fixing of the imported heat stren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m; that the Commissioner has given the findings in the impugned Order that aluminium glass panel gets its form and functioning utility because of frame and mere glass cannot be fixed to the masonry of the building without the support of the aluminium frame; that the material which only provide support cannot give essential character to the product, and therefore, the classification under Sub-heading 7610.90 is not sustainable. He also contended that the demand of duty has been made for the period from August, 1999 to February, 2000 under the show cause notice dated 12-3-2001 and as such demand is time barred; that they were under the bona fide belief that no duty is payable on the impugned goods as there was no process amounting to manufacture is involved; that further the silicon sealant was also not applied by them; that moreover on an identical issue the Commissioner (Appeals) has held that the process does not amount to manufacture. He also mentioned that since the raw material and other infrastructure was supplied by BH EL they were only working as hired labourer and hence they cannot be held to be a manufacturer as held by the Tribunal in the case of Maruti Udyog Ltd. v. CCE, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (9) of the Contract clearly provides that necessary hand tools, drilling machine, etc. for performance of the work would be arranged by the Appellant No. 1 at no extra cost to BH EL; that the contents of this clause clearly indicate that Aldowin were to make their own arrangement for the tools required; that this is supported by the statement of Shri M. Siva Kumar who admitted that Aldowin had been involved in fabrication of aluminium doors, windows, etc. from 1992 onwards having necessary expertise to do this work. Reliance has been placed on the decision in the case of CCE v. M.M. Khambatwala, 1996 (84) E.L.T. 161 (S.C.). The learned SDR also mentioned that role of BH EL was only supervision which is evident from the statement of Shri J. Roy Fernando who had stated that BH EL had restricted their role only to supervision, coordination, and monitoring progress of various agencies as per their requirement. He also relied upon the decision of the Tribunal in the case of Kerala State Electricity Board v. CCE, 1990 (47) E.L.T. 62 which has been affirmed, by the Supreme Court as reported in 1990 (47) E.L.T. A161. 6. The learned SDR submitted that the classification of aluminiu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is necessary and there must be transformation, and a new and different article must emerge having a distinctive name, character or use." The Supreme Court has laid down two-fold test for deciding whether the process is that of manufacture in the case of U.O.I. v. J.G. Glass Industries Ltd. (supra). The test are first, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity comes to exist; secondly, whether the commodity which was in existence will serve no purpose but for the said process. Applying this two-fold test we agree with the findings of the learned Commissioner, in the impugned Order that a different commercial commodity comes into existence by the processes undertaken and the raw materials which were used would not have serve the same purpose but for the processes undertaken. We are also in agreement with the findings in the impugned Order that the Appellant No. 1, Aldowin are the manufacturer of aluminium glass panel. The various Clauses of the contract as referred to in the impugned order clearly indicate that Aldowin are manufacturer and not only supplier of labour. The Scope of work as given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luminium panel and to erect glass wall does not amount to manufacture. It is thus apparent that there was confusion even in the Department whether the activity involved amounts to manufacture or not. It has been held by the Supreme Court in the case of Padmini Products v. CCE, 1989 (43) E.L.T. 195 (S.C.) that "mere failure or negligence on the part of the manufacturer either not to take out the licence or not to pay duty in case where there was scope for doubt, does not attract the extended limitation." It has also been held in the said judgment that the ingredient mentioned in proviso to Section 11A(1) postulate the positive act and suppression of facts is not failure to disclose the legal consequences of certain provisions. Further, the appellants also had the bona fide belief that they were only supplying the labour and were not manufacturing at all the goods in question. This view is also supported by the decision of the Appellate Tribunal in the case of Maruti Udyog Ltd. (supra) wherein it has been held that where the work is to be carried out under the total control and supervision of the Appellants the fabricators are to be held hired labour and not independent manufacturers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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