TMI Blog1984 (5) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Rules, 1944 for the contravention of section 6 of the Central Excises and Salt Act, 1944. In paragraph 6 of the SCN, the Contractor has also been asked to take note that the said notice was also a notice under section 11A of the Central Excises and Salt Act, 1944 for the duty not levied on the excisable goods falling1 under T.I. 68 manufactured and removed until then and up to the date of final disposal of the case. It is also proposed in the SCN that the actual amount of duty not levied would be determined by the competent authority after the required particulars were obtained from the Contractor and after following the procedure prescribed in section 11A of the Central Excises and Salt Act, 1944. The SCN further declares that the period of 5 years provided in the proviso to section 11A of the Central Excises and Salt Act, 1944 was applicable to the case as the Contractor had suppressed the facts stated in paragraph 2 of the SCN. 2. The reply of the Contractor ECC/VSP/F-3, dated 1-3-1984 was received on 1-3-1984. The Contractor also referred to their letter ECC/LEG/CE/264/MD, dated 2-11-1983 written to the Assistant Collector of Central Excise, Visakhapatnam I Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y similar to that of theirs; the Board had in that order held that the different processes carried out by the appellants did not result in manufacture of new goods attracting duty under T.I. 68. (viii) The site temporarily allotted to them for fabrication work was not a factory in terms of the judgments of the Gujarat High Court in Simmon Carves India Limited and another v. State of Gujarat, Criminal Revision Application 237 of 1978 and Engineering Construction Corporation Limited v. State of Gujarat, Criminal Revision Petition No. 267/78, the Gujarat High Court had held that a site establishment engaged in fabrication of steel etc. for erection in the project was not a factory (ix) They were only one of the many agencies engaged by VSP for various activities in their project. The project consisted of Civil, mechanical, Electrical and Instrumentation work as well as structural steel fabrication and erection of individual plant structures. The Contractor was involved only in structural steel fabrication and erection of plant structure. (x) The Contractor was engaged by VSP for semi-processing certain duty paid materials such as steel and to erect them into a building. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted to the site and installed in stages on the concrete foundation; the bottom piece of the column is fixed to the concrete foundation by holding-down bolts. Similarly, trusses are removed in two or three parts to the site assembled through welding and with bolts and nuts and then hoisted to its place in the shed and bolted and welded. When all the members (fabricated steel structurals) are transported to the site and erected it becomes a single permanent structure. The bottom portion of columns which are fixed to the concrete foundation by holding-down bolts are then embedded permanently in concrete. The Contractor thereafter fixes AC/GI sheets on the roof. All the fabricated steel structurals are given a primary coating of red-oxide before they are transported to the site for erection. 5. The action proposed in the SCN proceeds on the presumption that each of the fabricated steel structurals (individual members) removed from the fabrication yard and the shed eventually erected are excisable goods. The Contractor, on the other band, has contended that they are not goods , much less excisable goods and that their activities did not amount to manufacture as defined in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay he that they undergo some change, alteration or transformation, and yet retain their essential character and properties. The test in all cases, therefore, is to ascertain whether the result is commercially a different commodity, and it is irrelevant whether this result is produced by a mechanical or chemical process or otherwise. 50. The test for determining whether manufacture can be said to have taken place is whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity, but is recognised in the trade as a new and distinct commodity. .... Commonly manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered the original commodity experience a charge. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sold and are known to the market and are movable is goods . This position was confirmed in the judgments of the Supreme Court of India in Union of India v. M/s. Delhi Cloth and General Mills Company Limited and others - 1977 E.L.T. (J 199) and South Bihar Sugar Mills v. Union of India - 1978 E.L.T. (J 336). The columns of the shed erected by the Contractor are fixed to the concrete foundation by holding-down bolts. After the shed is completely erected the bottom portion of its columns which are fixed to the concrete foundation by holding-down bolts are further embedded permanently in concrete. I am, therefore, convinced that the shed is an immovable property. It is not goods and is, therefore, not excisable. 10. M/s. Otis Elevator Company (India) Limited undertook contracts for the erection and installation of elevators and escalators in buildings. Component parts for the elevators and escalators were either manufactured in their factory in Bombay or purchased from the market. In Order-in-Revision No. 561 of 1981 dated 29-7-1981 in respect of M/s. Otis Elevator Company (India) Limited - 1981 E.L.T. 720 (GOI) the Government of India held that elevators and escalators erected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement with the appellant s contention that the different processes carried out by them do not result in the manufacture of any new goods attracting duty under the C.E.T. Item 68. 12. In my view, therefore, the processes that brought into existence the fabricated steel structurals fabricated in the fabrication yard of the Contractor will not amount to manufacture as defined in section 2(f) of the Central Excises and Salt Act, 1944 and clarified in the judgment and other orders cited above. When there is no manufacture, the levy under section 3 of the Central Excises and Salt Act, 1944 is not attracted. When the levy itself is not attracted the provisions of the Act and/or the rules made thereunder become totally irrelevant to the fabricated steel structurals fabricated in the fabrication yard of the Contractor. Similarly, the steel structure (shed) erected from the fabricated steel structurals at the site is an immovable property and is, therefore, not goods . Hence it cannot be subjected to the levy under section 3 of the Central Excises and Salt Act, 1944. In short, it can be said that the activities of the Contractor so far as they relate to the fabricated steel structural ..... X X X X Extracts X X X X X X X X Extracts X X X X
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