On-site fabrication for an immovable project was not manufacture, so central excise duty and the demand notice were invalid.

Fabrication of steel structures at site for incorporation into an immovable construction project, on job-work using material supplied by the petitioner and under its supervision, did not amount to manufacture under section 2(f) of the Central Excise and Salt Act, 1944. Because the activity produced no excisable movable goods, no central excise duty was leviable under section 3, and the demand and penalty notice lacked jurisdiction. The interpretation was reinforced by the exemption notification for goods fabricated at site for use in construction work, which was consistent with excluding such on-site erection work from excise liability.

---

---

Issues: Whether fabrication of steel structures at site for use in a construction project amounted to manufacture so as to attract central excise duty, and whether the show cause notice demanding duty and penalty was without jurisdiction.

Analysis: The activity was carried out by a contractor at site on job-work basis from material supplied by the petitioner and under its supervision. The definition of manufacture in Section 2(f) of the Central Excise and Salt Act, 1944 was held not to cover such fabrication of structures embedded in earth, as manufacture is ordinarily associated with movable goods and not with erection of immovable structures. Since no excisable goods were manufactured, no duty was leviable under Section 3. The Court also noted that the Central Government had issued an exemption notification for goods fabricated at site for use in construction work, which reinforced the same interpretation.

Conclusion: Fabrication at site did not amount to manufacture and no excise duty was payable; the show cause notice was beyond jurisdiction.

Final Conclusion: The petition succeeded and the impugned demand notice was quashed because the activity did not fall within the charging provisions of central excise law.

Ratio Decidendi: Fabrication of steel structures at the construction site for incorporation into an immovable project, on the facts found, does not constitute manufacture of excisable goods and cannot be subjected to central excise duty.

---