2008 (7) TMI 342 - HC - Central Excise

Court rules no duty on office furniture assembly not manufacturing; revenue appeal dismissed.

The Court dismissed the revenue's appeal under Section 35G of the Central Excise Act against the Tribunal's order. It was held that the assessee was not ... Revenue claim that assessee has manufactured office furniture system/work stations (OFS/WS) from various parts of furniture purchased by them from different manufacturers - assessee claimed that it has only erected and installed the said OFS/WS at the sites of its customers – supplier cleared complete OFS/WS and not parts thereof, though cleared in a knocked down condition for the purpose of facilitating transportation - What the assessee received was complete OFS/WS and what it left on its clients’ sites was also complete OFS/WS. Nothing new had come into existence so as to bring the activities of the assessee within the parameters specified in Section 2(f) Issues:1. Appeal filed by revenue under Section 35G of the Central Excise Act against Tribunal's order.2. Whether the assessee is liable to pay duty on manufacturing office furniture system/work stations.Analysis:1. The appeal was filed by the revenue under Section 35G of the Central Excise Act against the order of the Tribunal. The issue in question was whether the assessee is liable to pay duty on the manufacturing of office furniture system/work stations. The revenue contended that the assessee had manufactured these systems from furniture parts purchased from various manufacturers, including Kemp & Co. The assessee argued that they were only marketing the systems and that duty had already been paid by Kemp & Co. on the entire system. The Tribunal examined the submissions and facts and concluded that there was no manufacturing falling under Section 2(f) of the Act by the assessee, hence no duty could be claimed on their activities.2. The Tribunal considered the classification of goods by the Assistant Commissioner in Kemp & Co.'s assessment, where it was determined that Kemp & Co. cleared furniture systems and not just parts. The Tribunal also observed that the assessee only assembled components at customers' premises based on orders. The Tribunal required a demonstration of the assembly process, which was completed in less than two minutes and could be repeated. It was concluded that Kemp & Co. cleared complete systems in a knocked down condition for transportation, equating it to the clearance of a complete system, not parts. Therefore, no additional duty was required to be paid by the assessee during assembly at the site.3. The Tribunal found that Kemp & Co. had cleared complete office furniture systems/work stations and not just parts, even though they were in a knocked down condition for transportation. The revenue argued that the assessee also manufactured these systems, but the Tribunal determined that no new product came into existence as the same complete systems were received and left at the clients' sites. The Tribunal's decision was based on factual findings, and it was concluded that no substantial question of law arose for consideration by the Court, leading to the dismissal of the appeal.