Excisability of fabricated structurals affirmed, but duty demand failed as limitation could not be extended on bona fide belief.

Fabricated iron and steel structurals used in factory construction were treated as excisable goods, applying the Larger Bench view that such fabrication amounts to manufacture; they were classified under Tariff Item 68 for the earlier period and under Chapter Heading 73.08 for the later period. The duty demand nevertheless failed on limitation because the assessee acted under a bona fide belief amid conflicting judicial views, and the extended limitation period was held unavailable since non-payment was not shown to be a wilful suppression with intent to evade duty.

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Issues: (i) Whether the structurals fabricated for construction of the factory building were excisable goods and, if so, under what tariff classification; (ii) Whether the duty demands were barred by limitation.

Issue (i): Whether the structurals fabricated for construction of the factory building were excisable goods and, if so, under what tariff classification.

Analysis: The issue of excisability of iron and steel structures fabricated at the construction site or at factory premises was treated as settled against the manufacturers by the Larger Bench decision in Mahindra & Mahindra Ltd., which held that such fabrication amounts to manufacture and the goods fall under Heading 73.08. Applying that ratio, the items in dispute were treated as excisable goods, classifiable under Tariff Item 68 for the earlier period and under Chapter Heading 73.08 for the subsequent period.

Conclusion: The structurals were held to be excisable goods and classifiable as stated above, against the assessee.

Issue (ii): Whether the duty demands were barred by limitation.

Analysis: The demands were issued beyond the normal period. The assessee's bona fide belief was accepted in view of conflicting prior decisions on dutiability of structurals and the fact that the legal position was settled in favour of the Revenue only by the later Larger Bench ruling. On that basis, the non-payment of duty was not treated as a wilful act with intent to evade duty, and the extended period was held unavailable.

Conclusion: The duty demands were held to be time-barred and unenforceable.

Final Conclusion: The goods were held excisable, but the duty demand failed on limitation, so the Revenue's appeal did not succeed on the merits of recovery.

Ratio Decidendi: Where the legal position on excisability is unsettled due to divergent judicial views and is settled only later, non-payment of duty before such settlement may not amount to suppression with intent to evade, and the extended limitation period cannot be invoked.

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