TaxTMI 
TaxTMI 
2001 (7) TMI 163
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....t with M/s. Rainbow Engineering Works (Rainbow); that on receipt of 3980.197 MT of raw material from DVC, they issued the same to Rainbow; that M/s. Rainbow completed a substantial amount of fabrication and erection of tanks and water pipes by 20-6-1986; that a show cause notice dated 21-6-1991 was issued to them as well as DVC for demanding duty for the period from 31-7-1986 to 31-5-1991 in respect of water pipes and tanks of steel; that the Commissioner, under the impugned order, confirmed the demand of duty against them and imposed penalty on them as well as M/s. DVC, holding that impugned pipes and tanks were erected after fabrication and as such these are moveable goods; since ownership of the impugned goods passed from the fabricator to the DVC, marketability of the goods has been proved; C.W. Pipes are classifiable under Sub-heading 7303.29 upto 28-2-1988 and thereafter under Sub-heading 7305.90 of the Schedule to the Central Excise Tariff Act; tanks are classifiable under Sub-heading 7308.90 and 73.09 of the Tariff; that as the appellants have invested huge amount for security deposits, procured free supply of raw materials, fabricated and erected the impugned goods and rec....
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....ucture at the site. 4.1.The learned Counsel further mentioned that M/s. Rainbow are the manufacturer of the impugned goods as the appellants had entered into a sub-contract with Rainbow and it was Rainbow who had actually carried out the work of fabrication and erection of tanks and pipes at the site of DVC; that it is settled law that the supplier of raw material is not the manufacturer and the actual manufacturer is job worker; that they also paid job charges to Rainbow. He relied upon the following decisions:- (i) Ujagar Prints v. U.O.I. - 1988 (38) E.L.T. 535 (S.C.) (ii) CCE, Baroda v. M.M. Khambhatwala - 1996 (84) E.L.T. 161 (S.C.) (iii) Basant Industries v. C.C.E., Kanpur - 1995 (75) E.L.T. 21 (S.C.) (iv) Chief Engineer, PWD v. C.C.E., Chennai - 1999 (114) E.L.T. 753 (T) = 1999 (35) RLT 153 (v) Universal Filteration Co. v. C.C.E., Mumbai - 2000 (116) E.L.T. 103 (T) = 2000 (37) RLT 273 (vi) ORG Systems v. C.C.E., Vadodar....
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....comes into existence as a result of piece by piece erection, no duty would be leviable on such property; that similar clarification was again given in Circular No. 17/89, dated 21-4-1989 regarding excisability of effluent treatment plant; that there has been a series of decisions of the Tribunal taking a view that such immovable property is not exigible to excise duty - C.C.E. v. Dodsal - 1987 (28) E.L.T. 352 (Tribunal) and SAE (India) Ltd. v. C.C.E. - 1988 (36) E.L.T. 613. 5.3.Finally the learned Counsel mentioned that the quantification of demand is not correct; that the pipes will be classifiable under sub-heading 7303.27 and not under sub-heading 7303.29 for the period upto 20-2-1988 because these were made from hot rolled products; that with effect from 1-3-1988, the pipes fall under Heading 73.05 and read with Notification No. 175/88, duty chargeable will be only Rs. 800/- PMT; that further the rates adopted for working out the duty demand on tanks is the rate of 1991 which is Rs. 11000/- PMT whereas the work was done in 1983-86 when the rate was Rs. 6,000/- PMT; that in the show cause notice tanks were classified under Heading 7309; that the Adjudicating Authority mention....
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....8-C.E. is to be claimed by the appellants after satisfying the conditions stipulated therein; that no evidence has been brought on record by the appellants that the pipes were fabricated out of hot rolled products produced in India; that mere fact of supply by Bokaro Steel Plant does not mean that the inputs were manufactured by them. He also emphasised that the Commissioner has confined to the amount of duty demanded in the show cause notice. He also submitted that the demand is not beyond the period of five years at all; that relevant criterion is the use of the impugned goods; that making payment is not relevant at all for the purpose of determining the time limit as payment is made in advance also; that removal of the goods takes place only when the pipes are welded into pipe line. He further mentioned that extended period of limitation for demanding duty is invokable as the fact of fabrication was suppressed from the Department; that the Circulars of the Board, relied upon by the learned Advocate for the appellants, clearly mention that if after assembly the goods are not moveable duty is not to be charged; that however, circulars clearly mention that various parts and compone....
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....e levied. The expression "produced or manufactured" has further been explained to mean that the goods so produced must satisfy the test of marketability". Now the Constitutional Bench of the Supreme Court in CCE, Jaipur v. Man Structurals Ltd. - 2001 (130) E.L.T. 401 (S.C.) = 2001 (44) RLT 113 (S.C.) has observed that "It was for the Tribunal to determine whether the structurals that the department sought to make exigible to excise duty in the various appeals before it were new, identifiable goods which were produced as a result of manufacture or processes and which are marketable". Thus the test of marketability or capable of being marketed is to be applied before any goods can be held to be exigible to excise duty. It has been claimed by the appellants that the tanks were fabricated stage by stage by welding hot rolled steel plates at the site and when the tanks came into existence, they were attached to the earth. The Revenue has not brought any evidence on record to show that the tanks were first fabricated and then they were attached to earth subsequently, to secure maximum operational efficiency and also for safety. We agree with the learned Advocate for the appellants that t....