TaxTMI 
TaxTMI 
2005 (4) TMI 91
X X X X Extracts X X X X
X X X X Extracts X X X X
....ginal facts having no bearing on the ultimate decision. The legal issues involved in both the petitions are identical so this common judgment and order would dispose of both the petitions. For the sake of convenience we propose to refer to the relevant facts drawn from Writ Petition No. 3121/1989. Factual Matrix : 3. The 1st petitioners are a company registered under the Companies Act, 1956, inter alia, engaged in civil engineering and building construction projects. Petitioner No. 2 is a share holder and director of the 1st petitioner-Company. 4. By a Memorandum of Agreement dated 24th July, 1986, the 1st petitioner entered into a contract with Bharat Petroleum Corporation Ltd. (BPCL) to construct LGP filling plant; whereunder the petitioners were to carry out, construct and complete the following major civil works, viz. : (i) Earth work i.e. excavation, filing foundation, plinth, etc.; (ii) Providing plain and re-enforced concrete; (iii) Masonry work; (iv) Finishing, printing and flooring to masonry surface and walls; (v) Doors and windows; (vi) Structural steel and allied works; (viii) Miscellaneous like fix....
X X X X Extracts X X X X
X X X X Extracts X X X X
....173Q(1) read with Rule 226 of the Rules. 8. The aforesaid show cause notice was replied by the petitioners' vide letter dated 12-9-1988, denying that the petitioners were liable to pay duty amount as demanded or otherwise or liable to penal action. 9. The 3rd respondent after hearing the petitioner, vide its order dated 5th June, 1986 (impugned order) confirmed the demand set up in the show cause notice and imposed a penalty of Rs. 2 lacs on the 1st petitioner and Rs. 50,000/- on the 2nd petitioner. 10. So far as another writ petition bearing No. 4698/1989 is concerned, challenge is to the show cause notice issued by the Revenue calling upon them to show cause why their activities of erecting purlines, beams trusses at factory site should not be treated as structural articles falling under sub-heading No. 7308.90 of Schedule to the Tariff Act exigible to excise duty. 11. Being aggrieved by the order passed by the 3rd respondent in Writ Petition No. 3121/1989 and show cause notice issued to the petitioners in Writ Petition No. 4698/1989 both of them preferred these petitions under Article 226 of the Constitution of India, contending therein that they are not liable t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The submission advanced on behalf of the petitioners cannot be brushed aside in view of the fact that this petition is pending for adjudication for past 14 years. The period prescribed for filing appeal has expired. The is no power with the appellate authority to condone delay of about 14 years. In our view, in view of the laid down and settled by various judgments of this Court as well as of the Apex Court, it would not be in the interest of justice to relegate the parties to alternate remedy at such a belated stage. Submissions : 16. Learned Counsel appearing for the respective petitioners urged that the action on the part of the respondents in purporting to levy excise duty on the so called 'structurals' and the consequent confirmation of the demand made by the 3rd respondent by the impugned orders impugned in Writ Petition No. 3121/89 is illegal, arbitrary and null and void. In support of this submission, various factual and legal contentions were raised during the course of hearing. Petitioners have also challenged constitutionality, validity and vires of Rule 73 of the Central Excise Rules, contending that it is ultra vires Articles 366 and 225 of the Constitut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as a part of immovable property), excise duty would be chargeable on such goods immediately upon their change of identity and prior to their assimilation in the structure or in the immovable property. In other words, where change of identity takes place in the course of construction or erection of a structure which is an immovable property, then, there would no manufacture of 'goods' involved and levy of excise duty would not be permissible. 22. Shri Jetly further submitted that it would be necessary to appreciate that there is tariff entry under sub-heading 7308.09 which makes structurals exigible to excise duty; if it results in new identifiable marketable goods due to manufacture or carrying on other processes. According to him, this aspect has not been gone into either by this Court or by the Apex Court in any of the cited precedents. He thus submits, considering existence of tariff entry goods of the petitioner are liable to be treated as exigible to excisable duty. He placed reliance on the judgment of the Apex Court in the case of Collector of Customs v. Man Structurals Ltd., 2001 (130) E.L.T. 401 (S.C.) in support of his submission. Issue : 23. In view of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mes within an entry is a mixed question of law and fact. 26. In the case of Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad, reported in 1995 (76) E.L.T. 241, Apex Court held that Section 3 levies duty on all excisable goods mentioned in the Schedule provided they are produced and manufactured. Therefore, where the goods are specified in the schedule, they are excisable goods but whether such goods can be subjected to duty would depend on whether they are produced or manufactured by the assessee. The expression "produced or manufactured" has been explained by this Court to mean that the goods so produced must satisfy the test of marketability. Consequently, it is always open to an assessee to prove that even though the goods were excisable goods, they could not be subjected to duty as they were not produced or manufactured by it or if they had been produced or manufactured, they were not marketed or capable of being marketed. 27. Similarly, in the case of Union of India v. Delhi Cloth & General Mills Co. Ltd. reported in 1997 (92) E.L.T. 315, Apex Court held that the commodity which is sought to be made liable to duty must be marketable in the condition in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (iii) that the fabrication of trusses and other fixtures such as beams, girders etc. came into existence as a part of immovable property and hence cannot be considered as goods, goods are only movable property; as they are not goods no excise duty is payable". This Court, had also an occasion to consider the identical question in the case of Sunflag Iron and Steel Co. Ltd. v. Addl. Collector of Central Excise, Nagpur, 2003 (162) E.L.T. 105 (Bom.) as to whether fabrication by contractors of steel structures, factory shed including roofing and cladding, at site, using raw materials supplied by the principal amounts to manufacture. This Court held that fabricated material at site was not liable to excise duty since it was neither done in the factory nor the goods produced were marketable. While taking this view, this Court has also approved the view taken by the Tribunal in Aruna Industries referred to hereinabove. 31. A view similar to above has also been taken by another Division Bench of this Court in the case of Gannon Dunkley & Co. Ltd. v. Union of India, 2003 (156) E.L.T. 467 (Bom.) reiterating earlier view taken by this Court in Tata Engineering and Locomotive Co. Ltd.,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed to supply duty paid material, which consisted of iron and steel products like plates, angles, channels, rods and strips as per required specifications. The contractor used to fabricate them by subjecting them to the process of cutting, drilling, riverting, welding and joining as required by the technical designs. The Excise Authorities called upon the assessee to pay excise duty by taking the view that it was 'manufacturing' or 'producing' excisable goods, which fell within the applicable Tariff entry in a well considered judgment in the CEGAT held that, in the first place, the activity of fabrication of the raw material indicated that it did not amount to manufacture and it was merely an act of fabrication or facilitation of the iron rods, angles, channels and so on for being fitted into the structure that was being built. While taking this view, the Division Bench relied upon judgment of Aruna Industries referred to above. The Division Bench reached to the conclusions reading as under : "Having considered the matter from all these aspects, we are satisfied that, the cases of the petitioners before us fall within the matrix exactly similar to the one i....