TaxTMI 
TaxTMI 
2002 (12) TMI 96
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....the petitioners and Mr. Godhamgaonkar, Standing Counsel, has appeared for respondent Nos. 1 and 2. 3.The facts leading to this petition are as follows : (a) An industrial estate has been developed at Waluj in District Aurangabad over the years. At the time when the factories of various companies were set up in this industrial estate, the petitioner No. 1 was entrusted with the works contract of setting up the factory shed of number of such companies. In the present petition, the dispute is with respect to the work carried on by the 1st petitioner for the four companies, namely, Bajaj Auto Ltd., Birla Erickson Tools Ltd., Anurang Engineering Pvt. Ltd. and Balkrishna Tyres Pvt. Ltd. The 1st petitioner erected the first factory shed for Bajaj Auto Ltd. from 1st January, 1984 to 25th June, 1988; for Birla Erickson from 1st April, 1987 to 28th February, 1988; for Anurang Engineering Pvt. Ltd., from 1st April, 1985 to 28th February, 1986 and for Balkrishna Tyres Pvt. Ltd. from 1st April, 1987 to 28th February, 1988. (b) It is the case of the petitioners that the 1st petitioner as per its constitution c....
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....tatutory record, without a cover of Central Excise gate pass and without filing classification list, price list and without determining the duty. The petitioner and these four Companies and their Directors were called upon to explain as to why penal action under Section 9AA of the Act should not be initiated for various violations. The notice enclosed therewith firstly a table giving the total claim on the aforesaid counts which came to Rs. 1,39,79,193.17 paise. The notice enclosed therewith the break up of this amount into various annexures. The annexures are with respect to these various separate items allegedly manufactured and which were supposed to be excisable under Section 3 of the Central Excise Act, 1944, such as, trusses, Purlins, etc. It is, however, material to note that all these annexures specifically state that these items were manufactured and removed without payment of duty by the petitioner having their site at M/s. Bajaj Auto Ltd., Waluj and at the site of other respective customers. The notice, thereafter, had imputation of charges in Annexure B and then the supporting documents were listed in Annexure C. (d) In the afo....
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....thorities which were cited on their behalf. It was argued before the respondent No. 2 that if the tests of manufacture or of marketability as laid down by the Supreme Court as being necessary for being excisable goods in some of the relevant judgments were applied, the alleged goods manufactured by the 1st petitioner could not be said to be marketable and, in fact, they were not goods. The respondent No. 2 made a distinction between goods captively consumed and for export and thereafter observed that criteria of marketability may depend upon as to how the assessee intends to clear the goods. Then observing, that inasmuch as, final product was becoming immovable, he observed as follows : "It is also not correct to say that because the final product is immovable property and purlins, trusses, etc., coming into existence only when they are fixed to a particular case and becoming part of immovable property they are not goods. Immovable goods are also excisable goods but because of the taxing scheme the levy is deferred to the point of removal. What is to be seen in such cases is that before acquiring the immovable nature whether the items had the character of movability to call them a....
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....d in the soil, it does not amount to manufacture of excisable goods within the meaning of Section 3 of the Central Excise Act. Mr. Kanade submitted that as far as the factual aspect is concerned, there is no controversy whatsoever. It is only the inference which is drawn by the 2nd respondent, which is erroneous and by which the petitioners are aggrieved, that is why instead of preferring an appeal, which is otherwise provided under Section 35 of the Act, this petition has been filed by invoking Article 226 of the Constitution of India. 6.Mr. Kanade firstly drew our attention to the judgment of the Apex Court in the case of Quality Steel Tubes (P) Ltd. v. Collector of Central Excise, U.P. - 1995 (75) E.L.T. 17 (S.C.). The question of law that arose for consideration in that appeal 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 duty under residuary Tariff Item No. 68 of the Schedule being excisable goods within the meaning of Central Excises and Salt Act, 1944. The Apex Court held that from the facts it was clear that the appellant had erected the concerned mill by ....
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.... Others v. Collector of Central Excise, Guntur and Others, reported in 1986 (25) E.L.T. 580 (Tribunal). In Para 12 of that judgment, the Court dealt with the submission of not exhausting the alternative remedy. The Court observed that in the case before it four items were in question and came to the conclusion that without any further evidence or fact finding being necessary ex facie they were not excisable to the excise duty. If that was the position, the Court held that after the petition having been admitted, there was no question of throwing out the petitioners at final hearing on the ground of alternative remedy. Mr. Kanade also drew our attention to an order of the Apex Court in the case of Commissioner, Central Excise, Nagpur v. Wainganga Sahkari S. Karkhana Ltd. [2002 (142) E.L.T. 12 (S.C.). This was only for a limited purpose to submit that a similar approach on erection of fix structures, in the case of Aruna Industries, Vishakhapatnam and Others (supra), was approved by the Apex Court. The Court held therein that fabrication at site cannot be taken as fabrication in a factory. 9.Mr. Kanade, therefore, submitted that from the facts of the case and from the record and fro....
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....lling to somebody else. He, therefore, submitted that in a situation like this, there was no question of the 1st petitioner being required to file the list or to obtain Central Excise Gate Pass and clear the goods after paying excise duty in the manufacturing yard. He submitted that if the approach of the respondent No. 2 that prior to being fitted into the soil, the components were movable, is to be accepted, it would go entirely against the law laid down by the Apex Court in the catena of judgments which we have seen earlier. He, therefore, submitted that the impugned order deserves to be interfered with and set aside. 10.Mr. Godhamgaonkar, learned Standing Counsel appearing for the respondent Nos. 1 and 2, on the other hand, submitted that the marketability was not specifically provided either under Section 3 of the Central Excise Act or under Entry 84 of list I in Schedule VII of the Constitution of India. He also referred to the definition of goods obtaining in clause (12) of Article 365 of the Constitution which states that the goods includes all material commodities and articles. In his submission, bringing in idea of marketability was erroneous. 11.Mr. Godhamgaonkar there....
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....bmitted to the 1st petitioner. This work was as per the specifications of the concerned party. The 1st petitioner was expected to execute that work. Inasmuch as, a specific statute of the State Government required the 1st petitioner to pay the sales tax on the goods involved in this works contract, the 1st petitioner did pay that tax. Thereafter, since the factory shed was to be set up in a particular part of the huge land of the concerned party, the 1st petitioner was required to move these items from one part of the land to the place where the factory was to be set up by engaging transporters. This all resulted into the factory shed being set up. Now, amongst the various items which the 1st petitioner is alleged to have manufactured was one item known as "truss". A truss is a framework as defined in the Oxford Dictionary. Now, a truss of a factory is not something which one would manufacture for anybody. It is manufactured for particular party. It is not freely marketable. Now, it was submitted that under Section 3 of the Central Excise Act, there is no concept of marketability. However, what is material to note is that though the Section talks of levy of excise duty on excisable....
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....d Other (supra); etc., and as to how it is preferred over another judgment of C.E.G.A.T. in the case of Structurals and Machineries (Bokaro) Pvt. Ltd. v. Collector of Central Excise, Patna [1984 (17) E.L.T. 127]. This judgment of the Division Bench is a common judgment in two writ petitions. The first one was concerning set up of an integrated Steel Plant and the second one was concerning construction of a factory building. As stated above, after taking overall view, the Division Bench in Para 28 of the judgment observed as follows : "We are, therefore, of the view that in both the cases, fabrication of structurals at the site of the principal by using raw materials supplied by the principal did not amount to "manufacture", nor was it done at "factory", nor were the goods salable or capable of being brought to the market for being bought or sold. We further notice that in both the cases the fabrication was with the immediate purpose of using in the factory shed or steel cold rolling mill which were being constructed and there was never an intention to sell it in the market. These facts, in our judgment, make it amply clear that the materials fabricated at the site by the contracto....