TMI Blog2005 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... is not immovable property. As laid down by this Court, in the case of Sunflag Iron and Steel Co. Ltd. [ 2001 (2) TMI 147 - HIGH COURT OF JUDICATURE AT BOMBAY] , the assessee carried out activity which was in pari materia with that of the activity of the present petitioners. In the said case also, the assessee had entered into an agreement for supply, fabrication and erection of structural steels and cladding works of Rolling Mills and steel melting shop (a shed) in the project area. Petitioners have made out a case that activities which were carried out by them were exactly in pari materia with the activities carried out by the petitioners in Sunflag Iron and Steel Co. Ltd. and consequently, their cases can be conveniently taken as covered by the law laid down by this Court in the case of Sunflag Iron and Steel Co. Ltd. duly affirmed by the Apex Court. We, thus, hold that considering facts in the cases at hand activities of fabrication and erection of structurals carried out at site; out of duty paid material; did not amount to 'manufacture' nor did it give birth to the goods capable of being sold in the market. Consequently, impugned order in Writ Petition and impugned sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and allied works; (viii) Miscellaneous like fixing, A.C. rain water, down take pipes, 'RCC', 'Jalli', fan clamps, etc. With a view to execute the contract, the petitioners purchased duty paid steel, channels, angles plates, etc., from the Steel Authority of India Ltd. and other dealers and were brought to the construction site of the petitioners. At the site, the channels, angles plates, etc., were first cut into various sizes, drilled with holes and welded as per the specifications and designs given by BPCL for this particular works contract. The cut, drilled or welded steel items were, than, erected on concrete columns by fixing them with nuts and bolts to form trusses, purlins, columns which were integral part of immovable structures duly embedded in the earth. This construction work was commenced under the aforesaid contract dated 24th July, 1986 and completed the same in the month of June, 1987. 5. The petitioners treated the aforesaid activities of cutting, drilling and welding of steel items like channels angles and plates, etc., as activities not amounting to 'manufacture'. According to the petitioners, the same did not bring about any transformatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at they are not liable to pay excise duty under Heading 73.09 or otherwise, both prior to and after its amendment, since activity of cutting, drilling and welding steel items neither amounts to 'manufacture' nor results into producing 'goods' for the purposes of the Act and the Rules. Preliminary Objection Consideration : 12. At the outset, Shri Jetly, learned Counsel appearing for the Revenue raised preliminary objection to the maintainability of the petitions contending that the order impugned in Writ Petition No. 3121/89 being appealable under Section 35 of the Act, the petitioners should be relegated to appellate remedy. 13. So far as Writ Petition No. 4698/89 is concerned, by way of preliminary objection, it is contended that the petitioners be directed to file their reply to the show cause notice with a direction to the respondents to hear the parties and adjudicate upon the matter. Consequently, it is thus submitted that this Court should refuse to exercise writ jurisdiction in favour of the petitioners. 14. Shri Jimmy Pochkhanwala, learned Senior Counsel appearing for the petitioner in Writ Petition No. 3121/89 whereas Shri D.B. Shroff, learned Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of India and Section 37 of the Act. 17. According to the petitioners, by using the said material in the construction of new buildings they neither manufactured any new or different articles, nor did they bring into existence any goods capable of being bought or sold in the market. The cutting, welding, and drilling work done at factory site to suit the plans and designs of the new buildings proposed in the project were meant wholly and exclusively for the construction of the new buildings. 18. According to the petitioners, neither petitioners nor the contractors under any circumstances manufactured or produced any structures or parts of structures. The only reason why the said materials were cut, welded, drilled, fastened, etc., was to build the new structures in the expansion programme of which the said materials became integral immovable parts. According to the petitioners, the said material, after being so modified by cutting, welding, drilling, etc., were useless for any purpose other than construction of the very same new building and were incapable of sale to any consumer in the open market either as goods or as articles of iron and steel. 19. According to the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions, the issue involved in the present case is: whether the fabrication of trusses, columns and purlines at site which became a part of immovable property are liable to excise duty under sub-heading 9308.90 of Tariff Act and/or the provisions of Central Excises and Salt Act, 1944. 24. Before embarking upon the rival submissions, it is necessary to consider relevant tariff entry applicable to the cases at hand. Heading No. Sub-heading No. Description of goods Rate of Duty (1) (2) (3) (4) 73.08 Other articles of iron or steel. 7308.10 Bottom Stools, stirring or poking roids, splash plates and troughts as are used in the factory or production in the manufacture of steel ingots and melted either during or after such use in the said factory. Nil. 7308.20 Chin and parts thereof, of iron or steel. 15% 7308.30 Nails, tacks, drawing pins corrugated nails, staples (other than those of heading No. 83.05) and similar articles of iron or steel whether or not with heads of other material, but excluding such articles with heads of copper. Reverts, cotters-pins, washers (including springs washes) and similar articles of iron and steel. 7308.41 Circlips 20% 7308.49 Other 15% 7308.50 Sewing need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex Court held on interpretation of Section 3 that the duty of excise is on the manufacture of goods and for an article to be goods they must be known in the market as such or they must be capable of being sold in the market as goods. Actual sale was not necessary. User in the captive consumption was not determinative of that article being capable of being sold in the market or known in the market as goods. Even transient items of article can be goods , provided they were known in the market as distinct and separate articles having separate uses during the short life span. Thus, the goods, with even unstable character can be marketable, if during the short period, they were capable of being known or sold in the market. 29. Learned Counsel for the petitioners also relied upon a judgment of the Supreme Court in the case of Municipal Corporation of Greater Bombay v. I.O.C. Ltd., AIR 1991 SC 686, wherein it is ruled that assuming there is manufacture of article before the same is chargeable to duty it must satisfy the test of marketability. The burden to prove marketability is upon the department. The mere mention of an article in an entry in the Central Excise Tariff's is not suffi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 32. The Apex Court in the case of Quality Steel Tubes (P) Ltd. v. Collector, 1995 (75) E.L.T. 17 (S.C.) has also ruled that erection of installation of plant cannot be said to result in excisable goods. In the case of Mittal Engineering Works (P) Ltd. v. Collector, 1996 (88) E.L.T. 622 (S.C.) the Supreme Court ruled that mono vertical crystallisers had to be assembled and erected at the customer's factory. Such assembly and erection was done either by the appellants in that case or by the customers. Similar view has been reiterated by the Apex Court in the case of Triveni Engineering and Industries Ltd. v. Collector of Central Excise, 2000 (120) E.L.T. 273. 33. The excise is an impost on the activity of the manufacture of goods . If what results from activity is an immovable property the same is to be treated as such and no duty is leviable in view thereof. 34. In the present cases at hand, the expansion activities resulted in the bringing into existence of civil structures of iron and steel which are permanently affixed to the earth as such they are immovable property not liable to excise duty. In this behalf, the petitioners rightly relied upon judgment of the Apex Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an error. 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 saleable or capable of being brought to the market for being sold. We further notice that in both the cases the fabrication was with the immediate purpose of using the factory shed or steel cold rolling mill which were being and there was never an intention to sell it in the market. These facts, in our judgment, make it amply clear that the material fabricated at the site by the contractors in both the cases were not exigible to excise duty under Section 3 of the Act. Hence, the orders in both the cases need to be set aside in exercise of writ jurisdiction. The aforesaid view of the Division Bench in Sunflag Iron and Steel Co. Ltd. came to be followed by another Bench of this Court in the case of Gannon Dunkerley Co. Ltd. v. Union of India, 2003 (156) E.L.T. 467 (Bom.) Both these judgments have been recently affirmed by the Apex Court in the Civil Appeals carried at the instance of the Revenue in Civil Appeal bearing Nos. 7533 and 7534 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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