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2019 (4) TMI 744 - CESTAT NEW DELHISSI Exemption - crossing over of threshold limit - payment of service tax on the installation charges - nature of activity in confusion - case of Revenue is that the payment of service tax on the installation charges does not mean that no excise duty is payable on goods manufactured and that no evidence about payment of service tax has been produced on record - Manufacture taking place or not? Whether excise duty can be imposed upon the impugned electronic interlocking signalling, railway signalling system for the purpose Section 3 of Central Excise Act, which is the charging provision for the authorities to levy and collection of duties of excise on all excisable goods which are produced or manufactured in India at the rates mentioned in the Schedule to the Tariff Act? Manufacture taking place or not? - Held that:- The several components which have respective marketability were purchased by the appellant against appropriate Sales Tax and then taken to the railway’s site to be so assembled, installed or commissioned they remain interconnected and simultaneously remain fastened to the racks embedded in the floor. Thus, it becomes clear that except assembling the modules required for the purpose along with other requisites as that of wires and switches and transporting them to the railways site and finally installing by interconnecting all the goods purchased on the payment of excise duty, there is no such process done by the appellant which may be called as manufacture - Definition of manufacture under Section 2(d) of CEA is sufficient to distinguish the activity/service of assembling from the activity of manufacture. Whether there is the emergence of new marketable commodity with a distinctive name? - Held that:- All the articles used while assembling the electronic signalling system were initially purchased from the various suppliers and were finally installed into the shape of EIS in the premises of railways. To our opinion nothing more than the service of installation and commissioning that has been rendered by the appellant as above. Above all, there has been a Board’s Circular No. 58/1/2002-CX dated 15.1.2002 regarding the excisability of plant and machinery assembled at the site after considering the several decisions of Hon’ble Apex Court, as quoted in the said circular - from the department circular also, it stands clear that the EIS herein do not qualify any of the criteria i.e. either of manufacture or marketability to the leviable to excise. Time limitation - Held that:- There remains no question of any evasion of duty, question of mala fide intent to evade the same does not at all arises. Hence, proviso to Section 73(3) of the Finance Act, 1994 could not have been invoked by the department nor there is any reason for the imposition of penalty upon the appellant. The show cause notice is therefore definitely barred by time. Appeal allowed - decided in favor of appellant.
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