ORDER
Shri S.L. Peeran
1. All these four appeals arise from common Order-in-Original No.2/97 dated 10.1.97 by which the Ld.Commissioner has confirmed duty demands of Rs.15,72,869/- in terms of Rule 9 (2) read with proviso to Section 11A (1). He has imposed a like sum as penalty under Section 173Q besides penalty of Rs.50,000/- on Shri B.S.Raman, Director of the Gas Filtration Engineering. Besides a penalty of Rs.25,000/- has been imposed on P.J.Muralidharn, Director of Gas Filtration Engineering. Hence, all of them have filed their appeals. The main issue that arises for consideration is as to whether the appellants have brought into existence movable and excisable items for the purpose of dutiability. Their contention is that they manufacture Demisters and Candle Filters which are about 70 meters in length and they are affixed on the chimneys. The chimney which is in working condition has to be shut down and made to cool. Thereafter, the old demisters and candle filters are removed and the present one are fixed inside the chimney and it becomes part and parcel of chimney and thus it is an immovable property. When they are removed in segments, they are not goods and the demisters and candle filters would become functional only when they are affixed inside the chimney. Segments are not independent or cannot be treated as complete goods. Each filter segment is independent and they are not complete to be treated as full goods.
2. They further contend that the allegations brought by the department was that they have manufactured and cleared the same without payment of duty and thus there was contravention of Rule 9 (2) and hence Larger period is extendable. Further allegation is that they have used the brand name of foreign company and as a result, they are not entitled to the exemption benefit under notification No.175/86 dated 1.3.86 and 1/93 dated 28.2.93. It is their contention that they are not affixing the brand name of foreign company. They had entered into an agreement with M/s. Begg Cousland & Co. Ltd., Glasgow and using their brand names “BECOIL, BECOFIL & BECONE”. It is their contention that this brand names have not been affixed on the products but only shown in the invoice. It is their contention that the Notification speaks of affixing the brand name on the goods and merely because it is shown in the contract or invoice that will not attract the exclusion clause of the Notification.
3. They had relied on large number of judgments and made several contentions which have been recorded in the order. They contend that the Commissioner has not given full thought to all their submissions and has passed a cryptic order which is not in detail and examination of facts. The findings recorded is not sustainable and requires to be set aside. They further plead that Commissioner has based his findings on Tribunal judgments rendered in the case of Festo Controls (P) Ltd. (1994 (72) ELT 919-T]; Sonomo Aromatics (P) Ltd. [1995 (56) ECR 54(T)] and Indian Reprographics (P) Ltd. [1995 (75) ELT 112(T)]. In all these cases the brand name was affixed on the goods, while in their case, no such affixing was done. They have filed before us the following citations to support their plea:-
Concept of manufacture:-
1) Thungabadhra Steel Products [1998 (98) ELT 334(Kar.)
2) Aruna Industries Vs. CCE[1986 (25) ELT 580]
3) CCE Vs. Doosal (P) Ltd. [1987 (28) ELT 352]
4) Richardson & Cruddas (1972) LTD. [1992 (57) ELT 336]
5) Triveni Engg. & Industry Ltd. [200 (120) ELT 273-SC]
6) Mohan Breweries & Distilleries [1999 (111) ELT 72 (T)
Extended Period – application:-
1) CCE Vs. Chemplptar Drugs [1989 (40) ELT 276 SC]
2) Padmini products Vs. CCE [1989 (43) ELT 195/sSC]
3) Tamilnadu Housing Board [1994 (74) ELT 9/SC]
4) Jayshree Textiles [1986 (23) ELT 491-T]
5) Sundaram Industries Vs.CCE [1987(37) ELT 221-T2
6) CCE Vs. Fertilizers & Chemicals [1986 (24) ELT 388-T
7) CCE Vs.IOC [1988(35) ELT 652-T]
Brand Name concept:-
1) Nylon India Ltd. [1997 (96) ELT 668/T]
2) Banner & Co. Vs. UOI [194 (70) 181-HC]
3) Dandy Rolls India Ltd.[1995(75) ELT 846-T]
4) A-49 – ELT -15.11.2000
Rule 209A – Penalty:-
1) Ravindra Textiles Vs. CCE [1992 (60) ELT 481-T]
2) B.R. Rule Vs. UOI [1990 (48) ELT 343-HC-Bom.]
3) ITC Ltd. Vs. CCE [1992 (59) ELT 163(T)]
The appellants also relied on the following judgments:-
1) Forest Industries Pvt. Ltd. Vs. CCE Belgaum [1996 (12) RLT 338 – CEGAT-SRB]
2) Brisk Surgical Cotton Vs. CCE Ahmedabad [1998 (29) RLT 49-CEGAT]
3) Vimal Printery & Co. Vs. CCE Vadodara [1999 (31) RLT 22 – CEGAT]
4) Vinsome Drill Vs. CCE, Indore [1999 (32) RLT 340-CEGAT]
5) CCE Chennai Vs. Turnbull Control System (I) Ltd. [2001 (42) RLT 216- CEGAT]
6) CCE Chennai Vs. Turnball Control System (I) Ltd. [2001 (42) RLT 216-CEGAT]
4. Heard Ld.Consultant Shri Namasivayan and Shri Parthasarathy Adv. for the appellants. They rely on the judgments already noted supra and contend that the activity carried out by them did not bring into existence goods. Segments cannot be treated as final items as the final item namely Demisters and Candle Filters would come into existence only when all the segments are fixed and made functional inside the chimney. The chimney would be 70 meters and segments are in parts, therefore they are not in fully finished form. When they are in fully finished form, they are affixed to the ground and become part and parcel of the chimney which is an immovable property. They contend that Commissioner has not given any findings but only has held that the segments are sold and they are to be treated as goods without examining their plea that segments are not goods and the entire goods would come into existence when the segments are affixed fully and in the chiney along with other civil work. They also denied that they have affixed the brand name on the product. In that connection, they have also referred to the judgments noted supra.
5. Ld. DR Shri Jayachandran points out to the findings and to the invoices wherein all the three items are referred. He contends that the order is based on facts and each case on judgment referred on the basis of examination of facts. He submits that the departmental officials when they questioned the appellant sand took statements they had clearly indicated that the segments were cleared from the factory by issue of invoices. Therefore, they are goods and at the time of clearance of the item from the factory gate. Therefore, based on the evidence collected by the Revenue, the Commissioner has analyzed and held the items to be goods and that they are not entitled to the benefit of Notification.
6. The consultant further contends that there were large number of Tribunal judgments holding that these are all immovable properties. Therefore, larger period was not invokable. They had no intention to evade duty and hence Commissioner’s imposing like like sum as penalty under Rule 173Q is not sustainable. Also, the Directors are not directly involved in the matter. They have not evaded duty intentionally and hence they cannot be imposed with penalties under Rule 209A. In this regard they have already referred to the judgments noted supra.
7. We have considered the submissions made by both the sides. W notice that a Constitutional bench of 5-Member Judge of the Hon’ble Apex Court considered the Revenue appeals on a like matter and have laid down the law that the matter has to be examined on the basis of facts and seen as to whether the items have arisen in the form of new identifiable goods as a result of manufacture or process and which are marketable in nature. The Constitutional bench comprising of Five Judges of the Hon’ble Apex Court considered the Revenue appeals on a like matter and have laid down the law that the matter has to be examined on the basis of facts and seen as to whether the items have arisen in the form of new identifiable goods as a result of manufacture or process and which are marketable in nature. The Constitutional bench comprising of Five Judges of the Hon’ble Apex Court remanded the matter on a large number of appeals by a Common order in CCE Jaipur Vs. Mans Structurals Ltd. [2001 (44) RLT 113]. The apex Court has also noted that the issued has to be considered in the light of their own judgment rendered in the case of Moti Laminates Vs. CCE 1995 (7) RLT 1 – SC] and Union of India and Another Vs. Delhi Cloth General Mills and anr [1997 (19) RLT 475. The Tribunal in all these matter which were remanded have also on due consideration, taken a view that the aspect pertaining to analyses of facts and that the matter requires total consideration of the facts and it can only be done by the original authority and have interest remanded to the original authority for de novo consideration. We notice that the main plea of the appellants that they were clearing segments and not the complete goods (Demisters and Cadle Filters) has not been considered by the Ld.Commissioner. Ld.Commissioner ought to have examined their plea that the item being Demisters and Candle Filters come into existence on erection in the chimney and not at the time when segments are removed from their factory. He has considered segments to be the final product and held them to be marketable. We are constrained to observe that the Ld.Commissioner is now required to apply the test laid down by the Apex Court in CCE Vs. Mans Structurals as well as in the case of Triveni Engineering & Industry Ltd.(supra). The Ld. Consultant Shri Namasivayam referred to the Tribunal Judgment in the case of Mohan breweries and Distilleries (supra) and contended that the Tribunal has already given relief holding the steel tanks as not movable property and goods. We are of the considered opinion that the order being cryptic and has not analyzed the basic facts pertaining to emergence of the item and whether the item are fixed to the ground to become immovable property, therefore, the entire matter is required to be remanded back to the Commissioner for de novo consideration.
8. The appellants contention that they are entitled for SSI Notification as the brand names were not affixed on the items cleared but it was only mentioned in the invoice has not been considered. It has already been held by the Tribunal in the case of NULON INDIA LTD. and BANNER & CO. (supra) and have held that the brand name is required to be affixed on the goods. There are few more judgments on this issue. The Commissioner is required to re-examine the issue in the light of the facts and verify as to whether affixing is on the goods or merely stated in the invoice and re-determine the issue after deciding the first issue pertaining to excitability of the goods.
9. The appellants have cited large number of judgments to support their plea and submitted that they were holding bona fide belief and they did not have any intention to evade duty. All these aspects have to be examined in the light of the several judgments cited by them including the non livability of penalty under Rule 173Q and Rule 209 A. As held by the Apex Court, there has to be intention to evade duty to impose penalty under Rule 173Q. This matter has not been examined and detailed findings recorded. Hence, we allow all the four appeals by way of remand. The ld Commissioner shall grant an opportunity of hearing to the appellants and reconsider all the pleas raised and judgments cited and record a detailed speaking order.