2023 (3) TMI 171 - AT - Central Excise

Taxability - liable to central excise duty or taxable under the provisions of the service tax for providing works contract service - activities of the fabrication/manufacture including installation (at premises of customer) of Retail Visual Identity (RVI) under contract by the appellant - Suppression of facts or not - extended period of limitation - HELD THAT:- After the goods are inspected by the Oil Companies or its nominated agencies, the appellant undertakes fabrication, wherein they do cutting, sizing, etc., as per measurements taken at the retail outlets. Partially fabricated frames in un-finished condition and other cut materials etc. are then transported to the site, where final adjustments are made at site by cutting, re-working, etc. Frames are finally fabricated and fixed (piece by piece) with the help of the angles and brackets fixed to the building facia, column, etc. Barring a few small signages, various elements of RVI upon final fabrication/erection at site like Canopy facia, building facia, monolith, etc are practically immovable. These cannot be removed without cannibalizing, only few smaller signages including Arches and spreaders (direction signs) are made in the factory.

Revenue have failed to identify the state or form in which the goods are removed from the factory and whether these are in marketable stage. We further find that the statement of the officers of the Oil Companies is not reliable, as the same is contrary to the documentary evidence being work order, inspection reports, etc. on record, forming part of the relied upon documents. The schedule of rates forming part of the work order mentions fabrication with prescribed materials as per drawings and specifications, fixed securely to existing canopycolumns by welding, etc. at site. ACM panel fixing - to ensure the joint gaps are uniform. Thus, from the work order, partial fabrication at site including welding etc. is evident - Revenue failed to establish that the partially fabricated goods removed from the factory were in marketable state. The whole case is made out on the basis of assumptions and presumptions. No inspection has been made by the Revenue at the factory premises of the appellant/assessee.

Admittedly the appellant have maintained proper books of accounts and had taken registration under the Service Tax Provisions for discharge of their tax liability and have accordingly discharged the service tax payable under the head “Works Contract Service” on the gross value under Compounding Scheme. Thus, Revenue had full knowledge of the activities of the appellant.

Extended period of limitation - HELD THAT:- On the activity of the appellant, central excise duty is not attracted, as the partially fabricated frames etc. removed from the works of the appellant are not in a marketable stage. It is also found that Revenue have failed to value the various elements of RVI or goods in the state, they are cleared from the factory and have grossly erred in charging the duty on the gross value of the work contract. It is also found that it has been clarified by the Oil Companies subsequently (after remand) that RVI elements are fabricated at site as per specific measurements and requirements. After installation, the RVI elements cannot be dismantled without cannibalizing and they become as integral part of the building facia, etc.

The impugned order is also bad as it was not proposed in the show cause notice to classify under CTH 8310 of CETA. Under the facts and circumstances, the extended period of limitation is also not applicable - Appeal allowed.