Site erection and assessable value rules exclude post-clearance charges, while suppression can justify extended limitation.

Site fabrication and erection of structural steel work, boilers and steam systems at a customer's premises are treated as non-excisable where they result in a permanent structure rather than marketable goods, though duty may still apply to articles manufactured and cleared from the factory. Notification No. 120/75-C.E. was confined to Tariff Item 68 goods cleared on sale and did not fully extend to work contracts for installation. Expenses incurred after factory clearance, including transport, insurance, loading, unloading, erection and commissioning, were excluded from assessable value, while manufacture-related design and technical specification costs could be included. Non-disclosure of contracts to excise authorities amounted to suppression of material facts, justifying extended limitation.

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Issues: (i) whether fabrication and erection of steel work, sheet roofing, boilers, and steam system at the customer's site amounted to manufacture or goods exigible to duty; (ii) whether the exemption under Notification No. 120/75-C.E. applied and whether post-clearance expenses were includible in the assessable value; (iii) whether the extended limitation period was available on the ground of suppression of facts.

Issue (i): whether fabrication and erection of steel work, sheet roofing, boilers, and steam system at the customer's site amounted to manufacture or goods exigible to duty.

Analysis: Fabrication and erection at site of structural steel work and similar installations were held not to amount to manufacture within the meaning of the excise law where the activity resulted in a permanent structure and not marketable goods. For the boilers and steam system, duty could attach to the articles manufactured and cleared from the factory, but not to the erection activity or the finished installation at site as such. The nature of the work and the point of removal from the factory were material.

Conclusion: The site erection itself was not exigible as manufacture, though the factory-clearance component remained liable to duty.

Issue (ii): whether the exemption under Notification No. 120/75-C.E. applied and whether post-clearance expenses were includible in the assessable value.

Analysis: The exemption was confined to goods falling under Tariff Item 68 cleared from the factory on sale, and it did not govern a contract for execution of work in the nature of completion of installation. For assessable value, transportation, insurance, loading, unloading, erection, and commissioning charges incurred after clearance from the factory were excluded, while any cost attributable to drawing, designing, and technical specification forming part of the manufacture could be included. In the steel-work item, the materials cleared from the factory before the relevant exemption date required de novo examination. In the boiler and steam-system items, the factory-clearance value was payable, but the post-clearance service elements were not includible.

Conclusion: The notification was not fully applicable to the work contracts, and post-clearance expenses were not includible, subject to fresh examination of the factory-clearance component.

Issue (iii): whether the extended limitation period was available on the ground of suppression of facts.

Analysis: The non-disclosure of the existence of the contracts to the excise authorities was treated as suppression of material facts. On that basis, the longer limitation period was held applicable.

Conclusion: The extended period of limitation was available to the department.

Final Conclusion: The impugned order was set aside and the matter was remanded for de novo adjudication with an opportunity to adduce evidence and be heard, while the finding on limitation was upheld.

Ratio Decidendi: Site erection resulting in a permanent structure is not manufacture by itself, post-clearance expenditure is excluded from assessable value, and deliberate non-disclosure of contracts amounts to suppression justifying extended limitation.

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