TMI Blog1997 (8) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... st for their product, the appellant had declared therein only certain parts of sub- assemblies of the storage system instead of classifying the whole storage system manufactured in the factory and cleared from the factory in Kit form for simple assembly at site. This storage system is used for storage of industrial components, hardwares, electronic Electrical components, tools etc. used in the industrial as well as office premises. Department s case was that the appellants showed only some of the parts/sub-assemblies like trolly, angle frame, handle boss assembly, duplex assembly and stopper assembly as articles manufactured by them in their factory claiming classification thereof, under sub-heading 9403.00 and also claiming exemption as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details of their activity was very well known to the Department and in such circumstances the demand was hit by time bar under Section 11A of the Act. The Commissioner of Central Excise, Pune, thereafter passed the impugned order dated 13-9-1996, in which he confirmed the duty demand Rs. 88,02,357/- under Section 11A of the Central Excise Act, 1944, and he also imposed a penalty of Rs. 8,00,000/- on the appellant under Rule 173Q and Rule 226 of the Central Excise Rules. He further ordered confiscation of the plant, machinery, land, building etc. used in connection with the manufacture of the goods in question under Rule 173Q(2) of the Central Excise Rules, levying a fine in lieu of confiscation Rs. 5,00,000/- (Rupees five lakhs only). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y being mounted on the rails by adopting processes like welding. In such a situation the ratio of the Supreme Court decision, the Sr. Counsel urged, will apply and no duty is chargeable on the storage system coming into existence as immovable property, because it is not goods at all. The ld. Sr. Counsel further referred to their works contract for the installation of the storage system which clearly indicates that civil works will have to be undertaken for erecting the storage system at the customers premises. The ld. Sr. Counsel referred to the appellants letter dated 14-7-1986 to the Jurisdictional Assistant Commissioner, wherein they have given the details of the work undertaken by them. The ld. Sr. Counsel pointed out therein, that some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site for erection. The ld. DR also argued that the storage system as a whole was not embedded to the earth; what is grouted to the floor are only the rails. The ld. JDR also referred to the reasoning in the Commissioner s order, wherein the Commissioner has applied Rule 2(a) of the Interpretative Rules of the Tariff. The storage system in the form in which it is cleared from the appellants factory has already attained the essential character of the finished goods, and so by applying this Rule, the unassembled article can be classified and assessed to duty as the finished article. In this context the ld. JDR also submitted the present case is distinguishable from the Supreme Court judgment in the case of Mittal Engineering Works (P) Ltd. rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r installing the storage system rails flush with floor level is indicated and civil work is required such as digging of trench and refilling it with concrete etc. The appellants undertake cost of civil work on extra charge at the option of the Customer. The product literature it is noted describes goods as a trolly mounted system moving to and fro from on rails. 8. There is also the Assistant Commissioner s letter dated 25-7-1986, which indicates that the Assistant Commissioner had visited the appellants factory and had examined the products manufactured by them at the factory, and the Assistant Commissioner had seen the storage system at the place of installation as well. The Assistant Commissioner has found that the storage system insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble as they were, noted the Supreme Court. 10. In the present case also what is cleared from the factory in Kit form or CKD condition is not storage system marketable as it is. Something more, by way of civil work to lay the rails on which the storage system is fixed, fabrication of the system by welding, including final painting has to be undertaken at site. The complete storage system comes into existence as immovable property at site after installation. It is also not the Department s case that the storage system as a whole is assembled and tested before clearance from the appellants factory. 11. When it is thus found that the storage system as it comes into existence is not goods at all, one cannot apply Rule 2(a) of Rules of Interp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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