TMI Blog1990 (1) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... et roofing : This work was executed by the appellants on behalf of M/s. Thirumalai Chemicals Limited, Sipcot, Ranipet. There was a contract dated 16-12-1976 for this work and the amount of contract was Rs. 57,253.82. The appellants raised an invoice for Rs. 57,253.82 vide invoice No. 00220 dated 16-12-1978, but they did not pay Central Excise duty, which, according to the calculation of the Department, was Rs. 2,862.69 at 5% on Rs. 57,253.82. The appellants contention before the lower authorities was that contract was for fabrication and erection of structural steel work at the site. Prior to 18-6-1977, vide Notification No. 54/75-C.E., dated 1-3-1975, the goods falling under Tariff Item 68 were fully exempted, so far as the appellants are concerned as the number of workers employed by them in their factory did not exceed 49. They also contended that mere erection of fabricated materials at the site of the customers did not constitute manufacture as defined in Section 2(f) of the Central Excises and Salt Act, 1944. The Assistant Collector of Central Excise held that the premises of Thirumalai Chemicals Limited was a factory and since the process of erection involved bringing int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (Appeals) upheld the decision of the Assistant Collector. (iii) M/s. SAS Chemicals (Madras) Limited : In this case the appellants entered into a contract with the customers for designing, manufacturing, erecting, and commissioning a steam system consisting of the following items :- (a) Boiler with all necessary mounting and fittings. (b) Water tube Passes (c) 2 feed water pumps with motor and starter. (d) Water softening plant etc. The contract provided for payment of Rs. 6,21,000/- for the entire steam system including the aforesaid items. The appellants declared a value of Rs. 4,25,000/- and paid Central Excise duty amounting to Rs. 21,250/-, whereas according to the Department, duty of Rs. 49,680/- at the rate of 5% was to be paid on the contract price of Rs. 6,21,000/-. The appellants did not pay excise duty on the transportation, erection and installation charges and commissioning charges included in the contract price since, as according to them, all these expenses were post-manufacturing expenses. The Assistant Collector held that the contract in this case was not only for supply of a boiler, but for designing, manufacturing, erecting and commissioning a ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory. On this point, reliance has been placed on the circular of the Central Board of Excise and Customs, reported in 1986 (7) E.C.R. 56C. Tribunal s decision in the case ot M/s. E. Merck (India) Pvt. Ltd., Bombay v. Collector of Central Excise, Bombay, reported in 1983 (13) E.L.T. 966 (Tri.) = 1983 ECR 662D (Cegat), is also relied on. Duty is not chargeable on immovable property. On this point reliance is placed on this Tribunal s decision reported in 1987 (28) E.L.T. 458 (Tribunal) in the case of Collector of Central Excise, Bangalore v. Intercon Engineers (P) Ltd., Bangalore in which it was held that after installation the machinery was embedded in the ground and it became immovable property and ceased to be goods . It was also held that the erection and service charges realised by the respondents therein for installation and maintenance of the machinery at the Customer s premises were expenses incurred after the removal of the machinery from the factory gate and the same were not includible in the assessable value. In the said case also the Notification No. 120/75-C.E., dated 30-4-1975 was involved. It was, therefore, held that the elements of costs of project report, plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent parts which have gone into manufacture and erection of boilers and removed from the factory have to be charged to duty. Since this aspect has not been gone into by the lower authority, then this may be remanded to the lower authority for de novo examination. In that case, for that financial year, assessment cannot be made under Notification No. 120/75-C.E. for other clearances on sale. 6. We have gone through the records of the case placed before us and have considered the arguments of the learned advocate and the learned Departmental Representative. Notification No. 120/75-C.E., dated 30-4-1975 reads as follows :- In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), cleared from the factory of manufacture, on sale, from so much of the duty of excise leviable thereon as in excess of the duty calculated on the basis of the invoice price (excluding duty and local taxes, if any, included in such price) charged by the manufacturer for the sale of such goods : Provided that the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 2(f) of the Central Excises and Salt Act. In the case of Collector of Central Excise, Baroda v. Dodsal Private Ltd., Baroda, reported in 1987 (28) E.L.T. 352 (Tribunal), it was held by this Tribunal that Transmission tower erected at site from structural material is a permanent structure and not goods liable to Central Excise duty. In the case of S.A.E. (INDIA) Ltd. v. Collector of Central Excise, reported in 1988 (36) E.L.T. 613 (Tribunal), it was again held by the Tribunal that Transmission towers erected at the site from the structural material would be permanent structure and would not admit the definition and description of the goods and the activity relating to the erection of such transmission towers would not come within the purview of manufacture under Section 2(f) of the Central Excises and Salt Act, 1944. In the decision reported in 1988 (38) E.L.T. 196 (Tribunal) in the case of Standard Industrial Engineering Co. v. Collector of Central Excise, it was held by the Tribunal that making of structurals such as plates, channels, angles, rounds by cutting, drilling etc. for construction of a shed or building, is not a manufacturing activity under Section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers is included in the contract price, the same would form part of the assessable value of the boilers. The details about the cost of various post-clearance expenses included in the total contract price of Rs. 3.6 lakhs have not been furnished in the order of the lower authorities. We are, therefore, unable to examine this aspect. This is required to be gone into in details by the lower authority. 9. The same principle, as discussed by us in the preceding two paragraphs will apply to the third item of work referred to in para-1(iii) of this order. 10. The show cause notice was issued to the appellants on 28-8-1980 invoking the limitation of five years in terms of the proviso (a) to Rule 10(1) of the Central Excise Rules, 1944. The longer time-limit has been invoked as the appellants did not disclose the existence of the three contracts. It has been alleged in the show cause notice that the proviso (iii) and (iv) of the Notification No. 120/75-C.E. were not complied with. We are of the view that non-disclosure of the existence of the contracts has amounted to suppression of facts on the part of the appellants. The time limit of five years is, therefore, applicable in this case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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