9911796707
TMI Blog1997 (11) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... lakh only on M/s. Binny Ltd. (Engg. Division), Madras under Rule 9(2), 52A and 173Q for breach of Rules 9(1), 52A, 173B, 173C, 173F, 173G and 174 of the Central Excise Rules, 1944. (v) A penalty of Rs. One lakh only is imposed upon M/s. Baghpat Cooperative Sugar Mills Ltd., Baghpat under Rule 209A of the Central Excise Rules, 1944 ibid. The dues so adjudged should be paid forthwith." 2. The facts leading to the present appeal are that it was gathered by the Central Excise Authorities, acting on intelligence, that M/s. Binny Limited, Madras had entered into a contract with M/s. Baghpat Cooperative Sugar Mills Ltd., Baghpat on 5-8-1989 to design and prepare engineering layout, manufacture, repair, procure and supply of boiling house with accessories for expansion of the Sugar plant of M/s. Baghpat Coop. Sugar Mills, Baghpat. The appellant has also entered into another contract to erect, commission and make ready for commercial use the said Boiling House with accessories. Investigations further revealed that the Appellant started manufacturing activities at the site for completion of the above referred contract situated in the factory premises of M/s. Baghpat Coop. Sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri V.S. Venugopalan, the ld. Advocate appearing for the appellants, submitted that the appellants were supplying raw materials to their sub-contractors; that critical parts of machinery was being manufactured in their factory at Madras; that some other items were being procured from the market on which duty was paid by the manufacturers; that only fabrication and erection work was being done by the sub-contractors. The ld. Counsel submitted that fabrication was done at the site; that erection was done piece by piece; that these goods are embedded in the ground and the goods are not marketable and, therefore, were not excisable. He submitted that the applicants were not manufacturers. In support of this contention, the ld. Counsel relied upon the judgment of the Apex Court in the case of M/s. Basant Industries [1995 (75) E.L.T. 21]. He submitted that in this case, the Central Excise Department issued a Show Cause Notice; that the appellants in that case got the power driven pumps manufactured with brand name of `Atul Shakti' from the different manufacturing units who in fact were manufacturing these pumps on behalf of the appellants. In reply, it was stated that the appellant had gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that of inspection for quality and standard and thus, the Appellant cannot be termed as manufacturers. 6. The ld. Counsel submitted that raw material was supplied by the appellants; that the contractors were working on their own; that the dealings between the two, viz. between the appellant and the sub-contractors were on principle to principle basis and, therefore, the contractors were actually the manufacturers and not the appellant. In support of this contention, he cited and relied upon the decision in the case of Kerala State Electricity Board v. C.C.E. [1990 (47) E.L.T. 62 (Tribunal)]. The ld. Counsel also referred to the decision of this Tribunal in the case of C.C.E. v. Sonali Enterprises [1991 (56) E.L.T. 164 (Tribunal) = 1992 (41) ECR 79] wherein the Tribunal held that the raw material supplier is not a manufacturer. 7. Referring to the decision of this Tribunal in the case of M/s. Tata Robin Fraser Ltd. v. C.C.E. [1990 (46) E.L.T. 562], the ld. Counsel submitted that the Tribunal in the case held that the goods were fabricated by independent fabricator on job work basis for supplier of raw materials and others. The fabricator is the manufacturer and not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugar Mills Ltd.; that the place does not belong to the sub-contractors; that the workshop and place for work was provided to the sub-contractors; that electricity bills etc. were required to be paid by the fabricators; that the agreement was duly signed by M/s. Baghpat Cooperative Sugar Mills Ltd. and M/s. Binny Limited. The ld. SDR submitted that for deciding the issue, a single point cannot be taken; that all the factors are to be taken together to decide as to who the manufacturer was. He submitted that the factors as the labour, raw materials, electricity bills, place of work, workshop, designs, etc. are to be considered together that Section 11A(1) proviso talks about the persons chargeable to duty; that the person chargeable with duty was the appellant as the contract stipulated that Central Excise Duty, if any, shall be payable by the appellant. In support of this contention, he referred to the decision of the Apex Court in the case of Chandrakant Krishna v. CC [ECR-C-Cus. 174 S.C.]; that it has clearly been brought out in para 29 of the impugned order that the sub-contractors were agents of the appellants. Reading copiously from the various paragraphs of the adjudication or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one at the site and erection of plant and machinery was also undertaken at the Site. The goods are not brought to the market for purposes of sale. Moreover, by fabrication and erection, these goods were embedded to earth. There is a catena of judgments that marketability is one of the tests to which the goods should be subjected. Both from the marketability angle as also from the angle that the plant and machinery on erection got embedded to earth and, therefore, they are not goods. Since they are not goods, therefore, they will not be chargeable to duty. 12. On the second issue as to who the manufacturer was, we note that the contract was signed between M/s. Binny Limited and M/s. Baghpat Coop. Sugar Mills. M/s. Binny Limited, in its turn, appointed three sub-contractors specializing in the job. They provided the raw materials to the sub-contractors and also inspected the goods before they are fabricated/erected at site. We note that the Apex Court in the case of M/s. Brittania Industries Limited v. CCE [1997 (89) E.L.T. 22] observed that Tin Sheets were supplied by the Customer, who kept with himself the right to reject metal containers; the work was done by four job workin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
