Excise duty on polyhouse activity required factual verification where manufacture and site erection overlapped with service tax treatment.

Excise duty liability on greenhouse/polyhouse activity could not be finally determined on the existing record because the factual distinction between manufacture at the factory and erection and commissioning at site remained unclear. The record also suggested possible overlap between excise and service tax treatment, since service tax had been discharged for erection and commissioning for the same period, but it was not clear whether that tax related to an independent service or to the same fabricated items assembled at site. The matter therefore required remand for denovo adjudication and factual verification before any conclusion on manufacture and tariff classification under Chapter sub-heading 9406 0019.

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Issues: (i) whether the dispute regarding excise duty on greenhouse/polyhouse activity could be finally decided on the existing record or required remand for fresh adjudication.

Analysis: The activity involved fabrication of materials at the factory, clearance in knocked down condition, and erection and commissioning at site. Separate proceedings for service tax on erection and commissioning for the same period had also been initiated and the assessee had discharged service tax with interest. The record did not clearly establish whether the service tax was paid on independent service activity or on the same fabricated items assembled at site, and it was therefore necessary to verify the factual overlap before determining whether the activity amounted to manufacture and attracted classification under Chapter sub-heading 9406 0019 of the Central Excise Tariff Act, 1985.

Conclusion: The matter was required to be remanded to the adjudicating authority for denovo adjudication with opportunity of hearing.

Final Conclusion: The impugned order was set aside and both appeals were disposed of by remand for fresh decision on the factual and tax liability issues.

Ratio Decidendi: Where the factual basis for distinguishing manufacture from erection and commissioning is unclear and there is potential overlap between excise duty and service tax demands, the dispute should be remanded for fresh adjudication rather than finally decided on an incomplete record.

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