TaxTMI 
TaxTMI 
1999 (2) TMI 127
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....ering Co. Ltd. The demand in these appeals relates to erection of coal handling plant. 3-5. Appeal Nos. E/1039 to 1041/90-B1. In these appeals of M/s. R.K. Khade Patil and others duty demand is on construction of new factory building, general stores and sugar godowns. 6-7. Appeal Nos. E/138/90-B1 and E/2145/90-B1 of M/s. Gannon Dunkerley and Co. Ltd. relate to duty demand on civil contracts for the construction of captive power plant at Bhatinda for the National Fertilisers Ltd. and construction work for Associated Bearing Co. Ltd. 8.   Appeal Nos. E/62/92-B1 of M/s. Man Structures Ltd. The duty demand is on preparation of parts of Electricity Towers and Latis Mast. 9-10. Appeal Nos. E/485/91-B1 and E/1923/91-B1. In these appeals of M/s. Jai Parabolic Springs Ltd., and Shri Kewal Singh, the demand of duty is on the setting up of factory shed. 11. E/4514/91-B1. In this appeal of M/s. Punjab Chemi-Plants Ltd., the work involved was the civil work for Rail Coach Factory. 12. Appeal No. E/883/91-B1. This appeal of M/s. Deccan Mechanical and Chemical Industries arises from duty demand on Trestles fabricated for civil construction. 13. A....
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....ity as columns, beams, girders, trusses, grills, block, hollows, etc. and are not bought and sold in the market by these names. They assume these identities only on their being placed in the building to perform architectural functions of beams, girders, purlins, etc. And once they are placed in the building and structures, they have become part of such buildings and structures which are immovable properties, and ceases to have an identity of their own. The levy has also been resisted on the ground that these items are not brought to the market (to be goods) as girders, purlins, etc. for sale and cannot be so brought also. 4. The appellants have also submitted that the excisability of plants and structures to duty had come up for consideration in several cases before the Supreme Court, High Court and Tribunal and it has been held that immovable structures, plants and structural items are not liable to Central Excise Duty. They have placed reliance mainly on the following judgments :- 1. 1995 (76) E.L.T. 241 (S.C.) - Moti Laminates Pvt. Ltd. v. C.C.E. 2. 1995 (75) E.L.T. 17 (S.C.) - Quality Steel Tubes Pvt. Ltd. v. C.C.E., U.P. 3. 1977 (95) E.L.T. 212 ....
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....chieve the object underlying the provision." 3. Gaya Cotton and Jute Mills v. U.O.I. - 1992 (61) E.L.T. 569 (Pat.) 4. Metro Exports Ltd. v. CEGAT - 1991 (51) E.L.T. 316 (Cal.) 5. Bansal Industries Gases v. Collector of Central Excise - 1988 (37) E.L.T. 347 (Cal.) 6. It was also submitted that since these products are specifically mentioned in the Tariff and such products come into existence only with some human labour and skill, manufacture has to be presumed. The decision is not to be based on whether the manufacture process was simple or complex. In support of this proposition, they have relied on the following judgments of the Supreme Court :- 1. Empire Industries Ltd. v. U.O.I. - 1985 (20) E.L.T. 179 (S.C.) 2. U.O.I. v. Parle Products - 1994 (74) E.L.T. 492 (S.C.) 3. Collector of Central Exicse, Bombay v. S.D. Fine Chemicals Pvt. Ltd. - 1995 (77) E.L.T. 49 (S.C.) 4. Collector of Central Excise v. Pratap Steel Rolling Mills - 1997 (94) E.L.T. 458 (S.C.) 5. Brake India Ltd. v. Spt. Central Excise - 1998 (101) E.L.T. 141 (S.C.) 6. Decorative Laminates India (P) Ltd. - 1996 (88) E.L.T. 3 (S.C.) (sic) ....
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....ainst the Revenue in view of the decisions of the Apex Court in Mittal Engineering Works Pvt. Ltd. v. Collector of Central Excise, Meerut, 1996 (88) E.L.T. 622 (S.C.) when the Court re-affirmed its decision in Quality Steel. The relevant portion is reproduced below :- "6. .................................................................................................................... The issue was whether "the tube mill and welding head erected and installed by the appellant for manufacture of tubes and pipes out of duty-paid raw material" was assessable to excise duty. The Court observed, having regard to the earlier decisions aforementioned, "The basic test, therefore, of levying duty under the Act is two-fold. One, that any article must be goods and second, that it should be marketable or capable of being brought to the market. Goods which are attached to the earth and thus become immovable and do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought and sold." It was also said that the erection and installation of a plant cannot be held to be excisable goods. If such wide meaning is assigned it would resul....
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....refore, is an essential ingredient in order to be dutiable under the Schedule to Central Excise Tariff Act, 1985. Even in respect of specified goods it could be established that it was not marketable or capable of being marketed, therefore, no duty was leviable on it. The same view was reiterated by the Supreme Court in Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad, 1975 (76) E.L.T. 241 (S.C.) when it observed as under :- "7. The duty of excise being on production and manufacture which means bringing out a new commodity, it is implicit that such goods must be usable, movable, saleable and marketable. The duty is on manufacture or production but the production or manufacture is carried on for taking such goods to the market for sale. The obvious rationale for levying excise duty linking it with production or manufacture is that the goods so produced must be a distinct commodity known as such in common parlance or to the commercial community for purposes of buying and selling. Since the solution that was produced could not be used as such without any further processing or application of heat or pressure, it could not be considered as goods on which any....
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....hedule by placing the goods in specific and general category does not alter the basic character of leviability. The duty is atracted not because an article is covered in any of the items or it falls in residuary category but it must further have been produced or manufactured and it is capable of being bought and sold. In South Bihar Sugar Mills Ltd. & Anr. v. U.O.I. and Anr., 1978 (2) E.L.T. (J 336) (S.C.) = AIR 1968 S.C. 922 it was held by this court : "The Act charges duty on manufacture of goods. The word `manufacture' implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. The duty is levied on goods. As the Act does not define goods, the legislature must be taken to have used that word in its ordinary, dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market. That would be such an article which would attract the Act was brought out in Union of India v. Delhi Cloth and General Mills Ltd., 1977 (1) E.L.T. (J 199) (S.....
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....oods, and to be goods these must be different, identifiable and distinct articles known to the market as such. It is then and then only that manufacture takes place attracting duty. In order to be goods, it was essential that as a result of the activity , goods must come into existence. For articles to be goods, these must be known in the market as such and these must be capable of being sold or being sold in the market as such." The submission of learned Counsel for the Department, therefore, that merely because the intermediate product manufactured by the appellants was resols and it is one of the items mentioned under Item 15A it was exigible to duty ignores the basic and primary test for exigibility of duty. The precise argument advanced by the learned Solicitor General of India was rejected in Bhor Industries (supra) and the order of the Tribunal in that case was set aside as "the test of marketability or capable of being marketed", was not applied by the Tribunal." 11. From the aforesaid judgments of the Supreme Court, it is clear that there is no authority in law for levying duty on immovable structures like factory building, power plant, etc. We also find that wi....
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....ted that these plants cannot be brought and sold in the market. Coal handling plant was a large assembly of machinery, buildings and structures spread over a vast area comprising mainly of wagon tripplers, conveyors, staker reclaimer, electric and manually operated hoists with trolleys, vibrators, built wares, switch gears, H.T. cables, transformers, etc. It has been explained along with photographs of the plant that it cannot be brought and sold in the market. We observe from the photographs produced during hearings that the plant consists of large civil structures, lengthy conveyor belts and civil structures to support such conveyor belts, called feeders, etc. spread over several hectares of land. It is not a case of machinery and plant being fixed to earth merely for vibration free functioning. They are immovable property. Same is the case with regard to factory buildings and other civil structures involved in the present appeals. The test laid down in the Sirpur Paper judgment was whether the machine can be sold in the market. The coal handling plant cannot be brought and sold in the market and, therefore, is not covered by this decision of the Supreme Court. We also observe th....