TaxTMI 
TaxTMI 
2013 (3) TMI 112
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....as for supply of fabricated pre-engineered steel structures for the warehouse as per the approved drawings of the Corporation. The second work order similarly was for supplying at site steel work in built-up square and rectangular closed hollow sections, and other related structures required by the Warehouse Corporation. Such structures were to be supplied at the Corporation's site at Mundra. 3. The manufacturer cleared goods from its factory site situated at Kathwada without payment of duty under A.R.E.-1 invoices, claiming that by virtue of Exemption Notification No. 58/2003-C.E., it carries no liability to pay duty. After such clearances in the month of December 2006 to February 2007 totalling valued at Rs. 5,50,28,186/- from its factory to the Central Warehousing Corporation, Mundra, the Department issued a show cause notice dated 20th December 2007 why Central Excise duty of Rs. 89,80,600/- be not recovered under Section 11A(1) of the Central Excise Act, 1944 ["Act" for short] with interest under Section 11AB of the Act, and further why penalty should not be imposed under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002. 4. The manufactur....
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....e. He, therefore, held that the manufacturer cannot claim benefit of exemption under Notification No. 3 of 2005. 7. The manufacturer approached the Tribunal against the order of the Commissioner. Tribunal concurred with the view of the Commissioner that the manufacturer did not fulfil two of the essential conditions of Notification No. 58 of 2003. Tribunal rejected the contention of the manufacturer that the activity did not amount to "manufacture" and that therefore, no excise duty was leviable at all. The Tribunal also considered the manufacturer's contention with respect to Notification No. 3/2005. After examining the material on record at a considerable length, the Tribunal came to the conclusion that the manufacturer had not fabricated the structures at site of the Corporation. Thus, on all counts, the Tribunal held in favour of the Department. However, while upholding the duty demand, in the concluding portion of its order, the Tribunal expressed an opinion that the manufacturer had a bona fide belief that it was eligible for exemption and therefore cleared the goods under Notification No. 58 of 2003. In that view of the matter, Tribunal was of the opinion that there wa....
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....tral Excise duty can be demanded on structure consist of column, portal, canopy, trusses, etc., which is embedded to earth and becomes part of immovable property?" 11. On behalf of the Department, learned advocate Shri Darshan Parikh vehemently contended that the Tribunal committed grave error in dropping the penalty demand, as also directing to give benefit of CENVAT credit to the manufacturer. He submitted that the Tribunal had upheld the Department's stand that the manufacturer was required to pay excise duty and was not entitled to exemption notifications. The Tribunal, therefore, committed an error in not confirming the penalty imposed by the Commissioner on the ground that the manufacturer had a bona fide belief that it was covered by the notification of exemption. 12. On the other hand, learned advocate Shri Modh appearing for the manufacturer submitted that the Tribunal correctly deleted the penalty demand. The manufacturer believed that the Warehousing Corporation was a SEZ Unit since it was located in the SEZ area. ARE-1 invoices were immediately cancelled when it was realized that exemption Notification No. 58 of 2003 was not available. Counsel further submit....
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....the client did amount to manufacturing activity. To that extent, though lengthy debate appeared to have taken place before the Tribunal, we need not enter into this controversy. 15. First, coming to the manufacturer's appeal and the contentions raised therein, the central issue hotly argued before us was that the manufacturer was entitled to exemption under Notification No. 3 of 2005. The applicability of the said notification require that goods should have been fabricated at site of work for use in construction work at such site. In the present case, as already noted, the Commissioner held that the goods were fabricated at the factory site of the manufacturer situated at Kathwada and were shifted thereafter at the site of the Corporation, situated at Mundra, which is about 400 kms. away. Additionally, Tribunal also examined this aspect at length. Tribunal noted various conditions of the work-orders issued by the Corporation in favour of the manufacturer, as also other materials and circumstances. The Tribunal discussed this issue and came to the following conclusion : "10. When we see the work order issued to the appellant by CWC, in the first work order, it was mentio....
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....ed by the manufacturer on record, came to the conclusion that the fabrication did not take place at the site of the Corporation at Mundra. We do not find any perversity in such finding, giving rise to any question of law. The Tribunal had then confirmed the findings of the Commissioner. Such concurrent findings of the Commissioner and the Tribunal are based on evidence on record. We had also perused the work orders given by the Warehousing Corporation in favour of the manufacturer. Fabrication at the site of the Corporation was never envisaged. Entire claim of the manufacturer is based on Exemption Notification No. 3/2005. One of the essential conditions was that the fabrication should take place at the site for construction work. This essential condition was not satisfied. The appeal of the manufacturer, therefore, must fail. 17. Coming to the Appeal of the Department, as already noted, the Commissioner as well as Tribunal concurrently found that the manufacturer had cleared the goods without payment of duty under the guise that it was exempt by virtue of Notification No. 58/2003-C.E. However, upon Department issuing the show cause notice, the manufacturer adopted a differen....
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....the bill of export duly assessed by the Customs authorities by SEZ or against the domestic procurement, certified by the SEZ unit by the Customs authorities. The manufacturer also had to ensure that the proof of export, duly certified by the Deputy Commissioner or Assistant Commissioner of Customs in SEZ was submitted to the officer-in-charge of the Central Excise Range concerned within a month from the date of removal of the goods. 22. Both these conditions require certain overt acts on the part of the manufacturer. The manufacturer not having taken these steps; not having supplied the documents, cannot be said to have been carrying any bona fide belief that it was protected under Notification No. 58 of 2003. Even if the manufacturer was covered under such notification, it was required to produce proof of export, duly certified by the prescribed authority and submit the same to the officer incharge of the Central Excise Range concerned and do this within a month of clearance of the goods. Admittedly, the manufacturer did not fulfill this requirement. In view of these virtually undisputed facts, we find it difficult to endorse the Tribunal's view that the manufacturer was und....