1999 (5) TMI 284 - AT - Central Excise

Steel plant construction items not dutiable under Central Excise as immovable property parts. Burden of proof on revenue.

BRAITHWAITE & CO. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, GUNTUR

BRAITHWAITE & CO. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, GUNTUR - 2000 (116) E.L.T. 487 (Tribunal) Issues:Determining whether parts of structurals and fabrication of certain structurals are liable for excisability and dutiability under Central Excise.Analysis:1. The appeals involved a common question of law and facts regarding the liability of structurals and fabricated items under Central Excise. The department had issued show cause notices based on contracts for erecting a steel plant, but previous adjudications had dropped the proceedings, arguing that items arising during construction were not dutiable goods.2. The appellant's argument, represented by a learned Senior Advocate, emphasized that the items in question were part of structurals and not separate goods for excisability. Referring to expert opinions and evidence, it was contended that these items did not have marketability and were not classifiable under specific tariff headings. The Senior Advocate also highlighted previous Tribunal judgments supporting non-dutiability of such items.3. The issue was further extended to other appeals involving similar goods, where it was argued that the items in question, like beams, columns, chimneys, etc., were structurals fabricated on-site and should not be considered dutiable. The time bar defense was raised, pointing out that demands were previously dropped, and the issue had already been settled by the Tribunal.4. The department's representative argued that each appeal needed independent examination, emphasizing that some goods arose independently before fabrication. However, the Tribunal, referencing the Elecon Engineering Co. case, concluded that such structurals were not goods but immovable properties, even if specified under specific tariff headings.5. In the detailed analysis, the Tribunal found that the items in question were structurals fabricated on-site and not independently arisen goods. The burden of proof regarding classification as parts was on the revenue, which was not discharged. The Tribunal disagreed with the Collector's findings on marketability and immovability, ultimately setting aside the orders on both merit and time bar.6. The Tribunal further examined other appeals, finding that most items were covered by previous judgments and that demands were not sustainable. The issue of contractors being the manufacturers and holding necessary registrations was acknowledged, leading to the allowance of parties' appeals and rejection of the department's appeals based on the Elecon Engineering Co. judgment.