P.S. Bajaj, Member (J)
1. The issue involved in the present appeal filed by the appellants against the impugned order-in-original dated 2-12-1999 passed by the Commissioner confirming the duty demand of Rs. 91,92,000/- payable with interest at the rate of 20% and imposing penalty of Rs. 92 lakhs on them, centres around the question whether they are entitled to the benefit of exemption Notification Nos. 36/94, dated 1-3-1994 and 51/95 dated 16-3-1995 or not.
2. The facts giving rise to this issue may briefly be stated as under:
3. The appellants, U.P. State Bridge Corporation Ltd. (owned by the U.P. Govt.) are engaged in the construction of flyovers, bridges etc. They got contract for the construction of Arterial expressway corridor project from the J&K Government in the year 1994. The J&K Government also provided them, a dedicated facility in the form of land free of cost near Bag-e-Bahu for the purposes of casting of the beams to be used in the construction. They accordingly did casting of the beams at that place and later on brought the same to the site of the construction where these were integrated into the concrete structure. On scrutiny of the record, it revealed that they manufactured and cleared 812 beams without payment of duty during the period February, 1994 to September, 1997 valued at Rs. 4,64,46,000/- at Bag-e-Bahu, Jammu involving Central Excise duty of Rs. 91, 52,000/- and without filing the classification list/declaration/price lists under Rules 173B and 173C of the Central Excise Rules. They were accordingly served with a show cause notice dated 30-4-1998 vide which they were called upon to pay the duty amount of Rs. 91,52,000/- and penalty was also proposed to be imposed on them. They contested the correctness of that show cause notice on the grounds, (i) the casting of beams meant for the construction of arterial expressway corridor could not be carried out at the main site being surrounded by very busy terminals and inter-sections market and residential localities and for that reason the J&K Government provided land free of cost near Bag-e-Bahu for that purpose and (ii) the beams after casting were used only for that project and were not sold in the market and as such were exempted from payment of duty in terms of Notification 51/95 dated 16-3-95 (iii) even the CBEC vide Circular No. 456/22/99-CX., dated 18-5-99 had clarified the scope of expression “site” as used in the relevant notifications providing exemption to the goods manufactured for use in construction of the project at site by observing that it should not be given restrictive meaning and shall include any premises made available to the manufacture of the goods, under the Contract/Agreement provided the goods manufactured at such premises are solely used in the said construction work only. Since the beams were manufactured at the site provided to them by the Government under the contract and were used solely for the construction work at site, were eligible for the benefit of Notifications Nos. 36/94 dated 1-3-94 and 51/95 dated 16-3-95.
4. The adjudicating authority (Commissioner) did not, however, agree with the contention of the appellants on the ground that since the goods were not manufactured at the site of construction, the benefit of Notifications No. 36/94 and 51/95 could not be given to the appellants and so also of the Board’s circular dated 18-5-99 being not retrospective in the nature. He confirmed the duty demand on them in terms of the show cause notice and also imposed penalty, as detailed above, through the impugned order.
5. Being dissatisfied with the order of the Commissioner, the appellants have come up in appeal before the Tribunal.
6. The learned counsel in order to assailed the validity of the impugned order of the Commissioner, has referred to Notifications Nos. 59/90 dated 20-3-90, 36/94 dated 1-3-94, 51/95 dated 16-3-95, 4/97 dated 1-3-97 and 5/98 dated 2-6-98 and also the Board’s circular dated 18-5-99 and contended that the view taken by the Commissioner that since the goods were not manufactured at the site of construction, the benefit of these notifications and Board’s circular could not be given to the appellants, is erroneous and devoid of law. He has also contended that the benefit of these notifications has been extended to the appellants even in their own earlier case by the Tribunal which was decided vide Final Order Nos. 786-787/99-D, dated 9-9-99 1999 (114) E.L.T. 421 (Tribunal). The counsel has also referred to the ratio of the law laid down in Pratibha Industries v. CCE decided by the Tribunal vide Final Order No. 380-381/97-D, dated 8-5-97 wherein the benefit of these notifications in question had been extended in similar circumstances to another construction company.
6. On the other hand, the learned JDR while refuting the arguments of the counsel, has only reiterated the correctness of the impugned order of the Commissioner.
7. We have heard both the sides and gone through the record.
8. The facts are not at all much in dispute. Admittedly the appellants, (U.P. State Undertaking fully owned by the U.P. Government) entered into contract for construction of Arterial expressway corridor project at Jammu, with the J&K Government. They were allotted site by the J & K Government free of cost near Bag-e-Bahu for casting beams to be used in the said construction. The beams so manufactured by them were classifiable under Heading 68.07 of the CETA. They claimed exemption from payment of duty on these beams in terms of Notifications Nos. 59/90 dated 20-3-90, 36/94 dated 1-3-94, 51/95 dated 16-3-95, 4/97 dated 1-3-97 and 5/98 dated 2-6-98, but the Commissioner through the impugned order had disallowed the benefit of these notifications on the ground that the casting of the beams was not done by them at the site of construction.
9. Through Notification No. 59/90 dated 20-3-90 the Government exempted the levy of duty on goods manufactured at the site of construction of building for use at such site, falling under sub-heading 6807.00 of the CETA. Thereafter another, Notification No. 36/94-CE., dated 1-3-94 was issued vide which also the exemption of duty to the goods manufactured at the site of construction for use at such site was maintained and continued. This notification was then amended vide Notification No. 51/95 dated 16-3-95 and the word “building” appearing therein was omitted and all goods manufactured at the site of construction for use in construction at such site were exempted from payment of duty. This very exemption was again reiterated through Notification No. 4/97 dated 1-3-97 and 5/98 dated 2-6-98.
10. The Commissioner has disallowed the benefit of above referred notifications to the appellants on the ground that the casting of beams used in the construction of arterial expressway corridor project was not made by the appellants at the site of construction rather it was done at the site away from the place of construction. But his this view cannot be subscribed and must be held to be erroneous. He has placed a very narrow interpretation on the expression “at site” as used in the above referred notifications by loosing sight of well-known principle that where a particular notification had been issued for extending the benefit to the as-sessees, it must be interpreted in such a manner that the intended benefit is actually enjoyed/availed by them and not that they are particularly deprived of the same, by the authorities implementing the said notification. The above referred notifications exempting the goods manufactured at the site of construction for use in the construction work at such site, had been issued by the Government with the sole object of extending their benefits to the companies/contractors engaged in the construction of the flyovers, bridges etc. The expression ‘manufactured at the site of construction’ used in these notifications in question, has to be interpreted liberally, so as to admit within its ambit the site allotted to the contractors for manufacturing the goods to be used in the construction work at such site, under the terms of agreement.
11. It is well known that invariably in a case of construction of flyovers and bridges in the heart of the congested cities, the Government provides place away from the site of construction, to the construction companies for casting of beams etc. to be used in the construction work, keeping in view public safety and heavy traffic jams, near and around that place. Therefore, if so allotted/place/site/premises, is not taken as site of construction in relation to the goods manufactured such as beams etc., to be used in the construction work at such site, the exemption from duty on the so manufactured goods provided by the Government through the notifications in question, would become redundant. Therefore, the implementing authority, must not dispose of the benefit of these notifications which had been proposed and notified by the Government for the companies engaged in the construction of flyovers, bridges etc. on the technical ground that the goods were manufactured at the actual site of construction.
12. In the instant case, the J&K Government allotted site at Bag-e-Bahu, a place away from the actual site where the construction of Arterial expressway corridor was to be carried out by the appellants for casting of the beams to be used in the construction work, as the said site was surrounded by busy terminals, inter section market and residential localities and the casting of beams at that place itself must have posed danger to the public health and safety and also cause a frequent traffic jams, accidents etc. Therefore, under these circumstances to disallow the benefit of exemption notifications referred above regarding payment of duty on the beams on the ground that these were not manufactured at the actual site of constructions, would defeat the very purpose for which the same had been issued.
13. In an indentical case M/s. Pratibha Industries v. CCE, Bombay, decided vide Final Order No. 380-387/97-D dated 8-5-97, wherein the benefit of these very notifications referred to above, was disallowed to the assessee and duty demand regarding the goods manufactured at a place allotted under the contract, away from the site of construction, for use in the construction work, was confirmed by the collector, but the Tribunal set aside the impugned order of the Collector and allowed the benefit of the exemption notifications.
14. Even in the appellants’ own earlier case along with Delhi Tourism & Transportation Development Corporation against CCE, New Delhi decided vide Final Order Nos. 786-787/99-D dated 9-9-1999 1999 (114) E.L.T. 421 (Tribunal) they had been allowed the benefit of the Notifications in question No. 36/94 and 51/95. The facts and circumstances in that case of the appellants, were similar to the present one. Therein also the appellants were allotted work for construction of three flyover in Delhi, one each at ITI Crossing, & one at Chirag Delhi, Lord Road, Wazira-bad and they were allotted site for casting of beams and girders to be used in the construction of those flyover at a place away from the site of construction under the contract. The duty demand for casting of beams and girders was raised by the Revenue from them on this very ground on which it has been raised in the present case that the casting was not done at the site of construction, but the Tribunal quashed that demand of the Revenue by accepting the appeal of the appellants and M/s. Delhi Tourism & Transportation Development Corporation and observed that the appellants were entitled to the benefit of the notifications in question referred to above.
15. The expression “site” appearing in Notification No. 5/98 dated 2-6-98 referred to above prescribing nil rate of duty in respect of the goods manufactured at the site of construction for use in construction work at such site, has been clarified by the CBEC through Circular No. 456/22/99-CX., dated 18-5-99. The relevant portion that circular runs as under :-
“The matter has been examined by the Board. It has been decided that the expression ‘site’ may 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”.
16. Therefore, keeping in view this circular of the Board and the facts and circumstances referred to above, the view taken by the Commissioner that since the goods (beams) were not manufactured at the site of construction, and as such the appellants were not entitled to the benefit of the exemption notifications referred to above and must pay duty thereon, cannot be legally subscribed and must be held to be erroneous in law. His impugned order confirming the duty demand on the appellants, therefore, deserves to be set aside.
17. In view of the discussion made above, the impugned order of the Commissioner is set aside and the appeal of the appellants is accepted with consequential relief in accordance with law.