Duty demand limited to goods fabricated in the unit; site fabrication excluded and liability remanded for recomputation.

Duty could not be demanded on the value of the entire project supplies where the materials comprised a mix of items fabricated at site, items partly fabricated in the Hyderabad unit and partly at site, and items purchased from the market or OEMs. The duty liability had to be confined to the goods actually fabricated in the appellant's unit, as fabrication done at site in Karnataka fell outside Hyderabad jurisdiction. The documents produced by the appellant required scrutiny for correct recomputation of duty and consequential penalty. The demand on the full value was set aside to that extent, and the matter was remanded for fresh computation of duty and reconsideration of penalty in accordance with law.

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Issues: Whether duty could be demanded on the value of the entire supplies made to the project, or only on the items fabricated in the appellant's Hyderabad unit, and whether the matter required recomputation of duty liability with reconsideration of penalty.

Analysis: The supplies were not uniform in nature. Some items were fabricated entirely at site and installed there, some were partly fabricated at the Hyderabad unit and partly at site, and some were purchased from the market or from original equipment manufacturers. Duty could not, therefore, be fastened on the value of the entire supplies. The authority at Hyderabad had no jurisdiction over fabrication done at site in Karnataka, and the duty liability had to be confined to items fabricated in the appellant's unit. The documents produced by the appellant also required scrutiny for correct computation of duty and consequential penalty.

Conclusion: The demand on the entire value of supplies was set aside to that extent, and the matter was remanded to the Original Authority for recomputation of duty liability and fresh decision on penalty in accordance with law.

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