2015 (4) TMI 247 - HC - Central Excise

Court rules petrol station signages movable goods subject to excise duty, dismisses appeal

The High Court upheld the Tribunal's decision that the signages erected at petrol stations were movable goods liable to excise duty. Despite the ... Excisability of movable goods - immovable versus movable character for levy of excise duty - manufacture and clearance in assembled or unassembled form - application of Board's Circular No.58/1/2002-CX regarding CKD/unassembled goods - inspection and certification as evidence of manufacture at factory premises - Rule 2(a) of the Rules of Interpretation of the Central Excise TariffExcisability of movable goods - immovable versus movable character for levy of excise duty - inspection and certification as evidence of manufacture at factory premises - manufacture and clearance in assembled or unassembled form - Signages erected at petrol stations are movable excisable goods and duty was rightly demanded. - HELD THAT: - The Court accepted the findings of the Adjudicating Authority and the Tribunal that complete signages were assembled at the assessee's premises, inspected and certified by RITES/IOC, dismantled for transport and thereafter reassembled at sites. Documentary evidence including seizure mahazar, delivery memos, erection reports and statements of RITES and IOC personnel supported the conclusion that finished signages were ready at the factory and were capable of being shifted without cannibalising. The Court held that such findings of fact are not open to interference in the present appeal and that an article which, though affixed to a foundation, can be detached and moved remains a movable excisable good; on those findings demand of duty was justified. [Paras 11, 14, 15, 16, 17]The finding that the signages are movable and excisable is upheld and the demand of excise duty is confirmed.Application of Board's Circular No.58/1/2002-CX regarding CKD/unassembled goods - Rule 2(a) of the Rules of Interpretation of the Central Excise Tariff - immovable versus movable character for levy of excise duty - Board's Circular No.58/1/2002-CX does not protect the assessee where the final product is held to be movable. - HELD THAT: - The Circular provides that where the final product is immovable the CKD or unassembled form will also not be dutiable as a whole, though identifiable excisable components remain dutiable. The authorities below found the final product (signage) to be movable. Since the product was held movable on the evidence, the Circular's exemption for immovable final products was inapplicable and offered no defence to the assessee. [Paras 19, 20]The Circular does not assist the assessee and the Tribunal's conclusion rejecting reliance on the Circular is upheld.Final Conclusion: The Tribunal's order confirming demand of excise duty on signages and upholding their excisable character is confirmed; the Civil Miscellaneous Appeal is dismissed and the Tribunal's order stands. Issues Involved:1. Whether the signages erected at petrol stations are movable goods liable to excise duty.2. Whether the Tribunal was correct in treating the signages as movable property contrary to the Board's clarification.Detailed Analysis:Issue 1: Whether the signages erected at petrol stations are movable goods liable to excise duty.The appellant contended that they only fabricated sign poles at their premises, while other components like fiberglass sheets and electrical panels were manufactured by third parties and assembled at various IOC sites, making the final product immovable and not subject to excise duty. They relied on the Board's Circular No.58/1/02-CX and several judicial decisions to support their claim that the signages, once erected, became immovable property.The Department argued that the appellant manufactured and assembled complete signages at their premises, which were inspected and certified by RITES before being dismantled for transportation to various IOC sites. The Tribunal reviewed the evidence, including statements from RITES and IOC officials, and documents like delivery memos and erection reports, concluding that the signages were fully assembled at the appellant's factory before being transported and reassembled at the sites. The Tribunal held that the signages were movable goods and fell under CSH 9405.90, thus liable to excise duty.The Tribunal distinguished the appellant's case from other judicial precedents by noting that the signages could be detached and shifted without damage, unlike fixtures that become immovable upon installation.Issue 2: Whether the Tribunal was correct in treating the signages as movable property contrary to the Board's clarification.The appellant cited the Board's Circular No.58/1/2002-CX, which states that immovable final products, even in CKD or unassembled form, are not dutiable as a whole. However, the Tribunal found that the signages were not immovable, as evidenced by their capability to be detached and relocated without damage. Consequently, the circular was deemed inapplicable.The Tribunal confirmed the Adjudicating Authority's findings that the signages were movable and thus excisable. It rejected the appellant's argument that only sign poles were manufactured at their premises, and the remaining parts were assembled at the sites. The Tribunal upheld the demand for excise duty, penalties, and interest, while reducing the penalty on the Managing Director and setting aside the penalty under Rule 173Q.Conclusion:The High Court upheld the Tribunal's decision, affirming that the signages were movable and subject to excise duty. The appellant's reliance on the Board's circular and judicial precedents was found inapplicable due to the specific facts of the case. The appeal was dismissed, and the Tribunal's order was confirmed.