ORDER
K.D. Mankar, Member (T).
1. M/s. Vikram Super Cement (Appellants) have been served show-cause notices dated 26-7-90, 19-9-90, 28-11-90, 20-3-91 and 1-7-91 seeking recovery of duty demand of Rs. 68,39,943/-. The said show-cause notices were confirmed by order-in-original dated 29-8-2002.
2. The appellants are engaged in the manufacture of cement falling under Chapter 25 of the Schedule to the Central Excise Tariff Act, 1985. The present dispute relates to the demand of duty on various structural items fabricated at site of their factory by various contractors to erect therein a cement manufacturing plant.
3. The present dispute relates to the demand of duty on various structural items like platform, supports, sheds, ladders, cable cases, towers, gantries, walkways, hoppers, cyclones, flanges, ducts, discharge hood, chutes etc. classifiable under sub-heading No. 7308.90 and sub-heading No. 8485.90.
4. Consequent to setting up of the plant for the manufacture of cement, the appellants entered into agreement with various contractors like M/s. Build-met Pvt. Ltd., M/s. M.L. Vishwakarma, M/s. Shankar Construction Co., and M/s. Petron Engineering Construction Pvt. Ltd. for fabrication of various structural items required for setting up the plant.
5. Proceedings were initiated by issue of show cause notices dated 26-7-90, 19-9-90, 28-11-90, 20-3-91 and 1-7-91, demanding duty.
6. The show cause notices were adjudicated by the Commissioner of Central Excise, Indore vide Order-in-Original dated 22-2-99, wherein it was categorically held that the duty demand relates to various structural items fabricated at the site of the appellants.
7. On appeal, the Tribunal vide final Order dated 23-8-2001 set aside the Order-in-original dated 22-2-99 and remanded the matter for consideration in the light of the decision of the Hon’ble Supreme Court in the case of Man Structures [2001 (130) E.L.T. 401 (S.C.)].
8. The appellants filed a detailed written submission dated 19-1-2002
along with documentary evidence in support of the various submissions made. The appellants submitted that the demand of duty on the various items is not sustainable inasmuch as they are immovable goods, not capable of being marketed as such. The appellants submitted that the various goods on which duty was being demanded were erected piece by piece resulting in the coming into existence of an immovable property not capable of being marketed as such. The appellants had also submitted that in any case they would be entitled for the benefit of the Notification No. 61/90-C.E. in respect of the goods falling under heading 73.08. In support of this submission, the appellants also submitted that they had reversed the credit availed on the inputs used for the manufacture of the structural items in view of the direction of the departmental authorities. The appellants also submitted that assuming any duty is payable, then the same is recoverable from the various contractors and not the appellants since the goods were manufactured by such contractors. The appellants also filed copies of photographs to establish the fact that the various goods on which duty is being demanded are immovable.
9. The Commissioner of Central Excise, Indore vide the impugned order dated 29-8-2002 has confirmed the total demand of Rs. 68,39,943/- on the various structural items. The Commissioner has held that, since the goods on which duty is being demanded are classifiable under heading 73.08 and heading 84.85 they are excisable goods. As regards immovability the Commissioner has held that, the said goods are fastened or attached to other articles for beneficial use and can be dismantled and moved to other places, hence duty is payable. The Commissioner, while admitting that, the goods are tailor-made, has held that, they are capable of being marketed. The Commissioner has further held that, there is no evidence led in by the appellants to show that the goods on which duty was being demanded were manufactured by the contractors. The benefit of Notification No. 61/90-C.E. has also been denied on the ground that the goods have been manufactured at one site and used at another site. Hence the present appeal.
10. We have heard the Id. Counsel and Id. DR.
11. During the hearing the Id. Counsel invited attention to Board’s Circular No. 456/22/99-CX, dated 18-5-99. In the said circular the board has clarified the scope of goods manufactured at the site of construction for use in construction work at such site with reference to exemption Notification No. 5/98-C.E., dated 2-6-98 (which is the same as Notification No. 61/90-C.E.). The Board has clarified that it has been decided that the construction site might not be given a restrictive meaning and shall include any premises made available to the manufacturer of goods falling under heading No. 68.07 of the Schedule to the Central Excise Tariff Act, 1985 by way of a specific mention in the contract/agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only. This will apply mutatis mutandis to the sub-heading No. 7308.50 of the Schedule to the Central Excise Tariff Act, 1985.
12. It appears that the contents of the said circular were not examined by the Commissioner while passing the impugned order. From the above, it would be very clear that, the structurals which fall under the heading No. 7308.90 would be fully exempted from Central Excise duty in terms of Notification No. 61/90-C.E. as these have been fabricated in the factory and permanently fixed therein, as part of the machinery. It is nobody’s case that these structurals have been removed from the factory for fitment elsewhere so as to deny the said exemption. Apart from merely saying that these could be capable of removal from one plant to another no evidence has been brought forward on the record to establish, that the said parts are capable of such removal. Hence findings based on mere presumptions cannot be sustained.
13. Apart from this an alternative argument has been canvassed to the effect that the items in question are not excisable goods as the same are not capable of being marketed as such. These structural items have been erected piece by piece at site. If these were dismantled, they would only turn into waste or scrap. These items would not be capable of being subjected to the same use in a different location for a different customer because during the process of dismantling of these items alignment and other engineering precision would be lost. Hence these being permanently embedded to earth these become a part of immovable property and do not come within the ambit of excisable goods. The case laws on this issue are very clear. In this connection, we note that the Hon’ble Supreme Court in their decision in CCE, Nagpur v. Wainganga Sahkari S. Karkhana Ltd. reported in 2002 (142) E.L.T. 12 (S.C.) have held that such articles cannot be subjected to excise duty. In the circumstances, we hold that the order passed by the Id. Commissioner cannot be sustained and deserves to be set aside.
14. Accordingly we allow the appeal and set aside the impugned order.