JUDGMENT
Archana Wadhwa
1. The Revenue has filed the present appeal being aggrieved with the order of the Commissioner (appeals). We have heard Shri V.K. Chaturvedi, ld. SDR for the Revenue and Shri D.B. Desai, ld. consultant for the respondent.
2. The Asst. Commissioner vide his order dt. 6.10.94 had confirmed demand of duty of Rs. 28,461/- (rupees twenty eight thousand four hundred sixty one) and imposed penalty of Rs. 5,000/- (rupees five thousand) on the respondents on the findings that they had fabricated pipes out of plates at the site of erection of cooling tower, which pipes are classifiable under heading 7305.90. The respondents’ contention right from the beginning had been that such pipes comes into existence only while being erected along with the tower and they cannot be called as excisable goods. The said contention of the respondents was not accepted by the Asst. Commissioner. However, Commissioner (Appeals), by relying upon the Supreme Court’s decision in the case of Quality Steel Tubes Pvt. Ltd. and in the case of J.K. Synthetics Ltd. – 1999 (33) RLT 129 (T) allowed the appeals. Hence the present appeal.
3. The Asst. Commissioner in his impugned order has observed as under:-
“I have gone through the case records carefully and the contentions made by M/s. Paharpur Cooling Towers Ltd., at the time of personal hearing held on 4.11.93, I find that the M.S. Steel Plates procured from M/s. SAIL by M/s. Paharpur Cooling Towers Ltd. are cut into small pieces of required length and bent at site in different diameters varying from 500 mm to 1600 mm as required for structured. After bringing the steel plates into the shape of pipes, most of the portion was welded to make them closed. Only little space was left out for adjustment and finally welding after carrying these pipes on the top of cooling towers. Therefore, I hold the view that M/s. Paharpur Cooling Towers Ltd. had actually carried on certain operations on the steel plates purchased by them in order to bring these plates in the form of pipes and this activity amounts to “manufacture” under Section 2(f) of the Central Excise & Salt Act, 1944″.
4. The Commissioner (Appeals) has set aside the above order by observing as under:-
“I have gone through the records carefully. The fabricated pipe, I find is an integral part of cooling tower structure. Unlike other parts e.g. Gear Reducer, Drive shaft, Fan Assembly etc.. This steel pipe cannot be disassembled and removed from cooling towers, since it cannot be removed from site without breaking civil work.
I find the situation compared to cases of bending steel strips into various shapes and angles. While building a construction either for the purpose of making shelves, wall hanging etc. just as such items cannot be removed without breaking the civil work. The said pipe cannot be removed without breaking the civil work. On remaining such shapes and angles will not have market as such except as scrap. Similarly the said pipe on removal will have only scrap value.
I find the cooling tower to have concrete foundation, concrete pillars, concrete roofs, brick walls on two sides and concrete towers on the other two sides and there is no doubt that cooling tower is an immovable property as per the various Supreme Court and CEGAT decisions and Ministry’s order cited above. Hence any structure embedded in civil work is immovable property. Accordingly, I find the said pipe fabricated at site is part and parcel of the tower. Moreover, the said pipe is about 150 mtr. long with several perforations tapering to close at one end. This particular item cannot offered for same in any market since it is tailor made for the sold and particular use of M/s. OPGC.
Accordingly, I hold that the fabrication work performed at site is not a manufacturing operation and that he said steel structure being integral part of cooling tower is not excisable. The appeal is accordingly allowed. There shall be no penalty.
5. The Revenue has challenged the above order on the grounds that the conversion of MS plates into pipes at site amounts to manufacture inasmuch as pipe is a specified item. They have also referred to various decisions.
6. After giving our careful consideration to the submissions made by both the sides we find that the Revenue is seeking to levy duty on the MS pipe which have come into existence, while being erected along with the wall of cooling tower. The pipe does not come into existence at any time prior to being erected. There is no dispute about the fact that the final pipe comes into existence only when it is finally welded after adjusting the perforation throughout the length. The said pipe is also fixed to the roof by civil work on top of the cooling tower. As such we find that the Commissioner (Appeals) was correct in holding that the said pipes cannot be held to be excisable. We do not find any infirmity in the view taken by the Commissioner (appeals). Accordingly we reject the appeal.
Pronounced in the court.