Water treatment plant assembly not manufacturing; demands set aside. Time-barred demand ruled in favor.

The Tribunal held that the assembly of water treatment plants at the site did not amount to manufacturing excisable goods, as it did not bring new goods into existence. The demands and penalties imposed on the appellants were set aside, emphasizing that the assembly at the site did not constitute a manufacturing process. The Tribunal also found the demand to be time-barred and ruled in favor of the appellants, setting aside the impugned orders in the 27 appeals and granting consequential relief.

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Issues:
Manufacture and excisability of water treatment plant at site.

Analysis:
The judgment dealt with 27 appeals raising a common question regarding the manufacture and excisability of water treatment plants at the site. The Commissioner of Central Excise, Chennai III Commissionerate had confirmed demands and imposed penalties on M/s. Ion Exchange (India) Ltd. and other parties for alleged clearance without payment of duty. The Commissioner held that the water treatment plants were assembled and erected at different sites, not within the factory premises, and thus confirmed duty liability and penalties. However, the Tribunal, in a previous Final Order, upheld the contention that such assembly did not result in the process of manufacture, considering the water treatment plants as immovable property. Therefore, the demands against the appellant were set aside in Final Order No. 790/2002.

The issue was further discussed with reference to other parties like M/s. Bee Gee Associates and M/s. Asian Peroxides Ltd., Nellore. They contended that the assembly at the site did not result in dutiable goods but rather in immovable property. They sought waiver of pre-deposit and appealed for setting aside penalties. Reference was made to a Delhi Bench case where it was held that water treatment plants assembled at the customer's factory site were not excisable and could not be sold in the market. The Revenue's appeal was rejected based on the Apex Court judgment in Triveni Engineering & Indus. Ltd. v. Commissioner.

The Departmental Representatives reiterated their contention seeking confirmation of demands. However, the Tribunal, after careful consideration, noted that the issue had been previously decided in favor of the appellants. The Third Member's findings emphasized that the assembly at the site did not amount to manufacturing industrial water treatment plants, as the appellant's activities did not constitute a manufacturing process bringing new goods into existence. The demand was also considered time-barred as relevant facts were known to both sides, and there was no intention to evade duty payment.

In conclusion, the Tribunal upheld the previous decision that the assembly at the site did not result in excisable goods, setting aside the impugned orders in the 27 appeals and allowing the appeals. The COD application in one appeal was allowed, and stay applications were also granted, providing consequential relief.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by the parties, previous decisions, and the final decision of the Tribunal based on the interpretation of the law and relevant precedents.

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