TMI Blog1989 (10) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... d cleared machinery items from their factory at Jamshedpur on payment of duty. Total amount of duty paid on those items was Rs. 33,44,00,880/-. It was alleged in a show cause notice dated 16-1-1982 against the appellants as follows :- M/s. TRF Ltd., Jamshedpur knew that as per standing orders and instructions, the goods falling under T.I. 68 which are cleared in knocked down condition to be assembled at site and over a period of time against a particular contract, clearances are assessable to duty on the value of the articles in completely assembled condition. . . Thus it is evident that M/s. TRF have not discharged their duty liability fully on the goods of T.I. 68 manufactured by them in completely assembled condition and in this way it appears that they have evaded payment of duty approximately of Rs. 1,05,94,116/-. The actual amount of duty evaded is, however, under investigation which will be intimated to them at the time of adjudication." 2.1. In their reply to the show cause notice the appellants contended that they had two types of activities, one as a manufacturer and the other as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the contract order for the execution of which certain items of machinery/equipments were cleared from their works at Jamshedpur, certain items were purchased from the market and other items got fabricated from other parties. Collector s Findings. - In the instant cases machinery items appears to have been manufactured at site out of the components partially obtained from the assessees works at Jamshedpur which were finally assessed to duty and partially bought from the market. Thus dutiability of the goods manufactured at site in such cases would have to be determined independent of the duty already paid on the components, whether the same was brought from the manufacturers works or from the market. If some goods have actually been manufactured at site their duty liability would have to be fixed independently on its value irrespective of the duty already paid on the inputs. of course, whatever set-off of duty on inputs is permissible while paying duty on finished goods, that aspect will also have to be taken into consideration. 3.1. Dealing with the appellant s plea to the effect that turn-key projects are not goods for the purpose of levy under Tariff Item 68 and the reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned Advocate for the appellants Shri G.V. Naik, learned JCDR relied upon Patna High Court s judgment reported in 1988 (33) E.L.T. 297 (Patna) (TISCO v. U.O.I.). It was pointed out that the Patna H. C. did not accept the judgment of Government of India in the case of Otis Elevators mentioned supra. The learned JCDR also relied upon Supreme Court s judgment in the case reported in 1988 (38) E.L.T. 566 (Name Tulaman Mfg. Co. v. C.C.E.). 4.2. Distinguishing the aforesaid two authorities relied upon by the learned JCDR, the learned Advocate for the appellants has submitted that in the case before the Patna High Court TISCO had manufactured a complete crane at their factory, gave inspection and trial run at their factory and it was in these circumstances that the High Court came to the conclusion that the excisable goods namely cranes came into existence at TISCO s factory and thereafter the said crane was removed in CKD condition. There is no such completion of the bulk material handling system in the TRF s works at Jamshedpur, and it could not be so in view of the large amount of civil and construction work required to be undertaken at site. The learned Advocate has, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically assembled at site out of the components brought by the appellants at site either from their own works or from the independent fabricators or purchased from the market. The adjudicating authority has apparently taken the completion of the project as the assembly of the machinery at site. The project by itself being an immovable property cannot be charged to duty. This is apparent from his findings when he states while dealing with the appellants reliance on Government of India s order in the case of Otis Elevators (India) Ltd. that the immovable property has not been charged to duty because the appellants have been given the benefit of deduction of erection, installation and commissioning charges charged by them. It has been stated by the appellants that they manufacture various items at their Jamshedpur factory for outright sales or for clearance on their own account to fulfill their construction contracts. There is not even an allegation that clearances of items manufactured by them are undervalued as compared to clearances for outright sales. Collector could not, in law, adopt an indirect approach in the absence of any allegation, leave apart a finding based on som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T, 600 (A.P.) (2) Gangadhar v. Collector of Central Excise, Allahabad -1979 (4) E.L.T. 597 (Para 4) (Allahabad) (3) Philips India v. Union of India -1980 (6) E.L.T. 263 (Allahabad) (4) Metal Box v. Collector of Central Excise -1986 (23) E.L.T. 187 (CEGAT) (5) Kalsi Tyres v. Collector of Central Excise -1986 (26) E.L.T. 631 (CEGAT) (6) Prasad Engineering v. Collector of Central Excise -1987 (31) E.L.T. 247 (7) R.K.H. Industries v. Union of India -1984 (16) E.L.T. 40, para 4 (Bombay) (8) Lucas Limited v. Collector of C. Ex. -1984 (16) E.L.T. 415 (CEGAT) (9) Collector of Central Excise v. Modo Plast -1985 (21) E.L.T. 187 (CEGAT) (10) Standard Motors v. Collector of C. Ex. -1985 E.C.R. 1807 (CEGAT) -1986 (24) E.L.T. 155 (Tri.) (11) Jay Engineering v. Collector of Central Excise - 1985 (21) E.L.T. 299 (CEGAT) (12) P.M. Abdul Latif v. Assistant Collector -1985 (22) E.L.T. 758 (Madras) (13) TELCO v. Union of India -1988 (35) E.L.T. (Patna). 7.1. Rebutting the JCDR s reliance on Shree Agency and Bajrang Gopilal s cases, the learned Advocate has submitted that those cases are based on the peculiar facts available therein. The Courts found that the real manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce there is absolutely no evidence on record to even hint at in that direction. The adjudicating authority has merely relied upon the legal interpretation given by him to the definition of manufacturer under Section 2(f) of the Central Excises and Salt Act. In view of the series of judgments on this issue we disagree with the interpretation of the Collector. 9. The 3rd issue discussed by the Collector, namely the following need not be dealt with by us because this issue has been decided by the Collector in favour of the appellants. It is for this reason that the Collector has held the appellants liable to differential duty in respect of 12 contracts alone out of 52 contracts executed by them during the relevant period :- Whether the proper officer to take action on the alleged evasion of duty on the goods said to have been manufactured at site located in other Collectorates is the officer in whose jurisdiction the assessee s works is located or the officer in whose jurisdiction the site of such manufacture is located. 10. The next issue is one of limitation. It is pleaded that the show cause notice was issued on 16-1-1982 and addendum to the show cause notice was again is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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