TMI Blog2000 (1) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... who were independent fabricators. The appellants entered into contract for building factory and structural fabrications. The dealings between the appellants and its employers Goa Shipyard Ltd. was on principal to principal basis and equally the dealings between the appellants and sub-contractors ICI were on principal to principal basis. Raw material was supplied by the Goa Shipyard Ltd. Out of the price paid by Goa Shipyard Ltd. the appellants retained the middleman trader s profit and pass on the remaining job work charges to the actual fabricator viz. ICI. As stated earlier the fabricator is ICI Ltd., Madras, which was an independent person and not a dummy of the appellants. A SCN was issued on 6-2-1991, (page 2 of the Paper Book) alleging that the appellants had fabricated steel structures and roofing systems weighing 482.376 MTs valued at Rs. 62,19,039.75 during construction of Bay I of M/s Goa Shipyard Ltd. and appellants failed to pay an amount of Rs. 9,79,498.75 by way of duties of Central Excise. The SCN also charged the appellants GSL Vaso of contravening provisions of various Rules like 9, 49, 53, 173B, 173C, 173G, etc. and have rendered themselves liable to penalty under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jagar Prints Ltd. case. The adjudicating authority on the basis of the materials before him rejected the contentions of the appellants and confirmed the duty demand under the Show Cause Notice and also imposed penalty. Hence the present appeal. 3. Shri M.K. Maingi, ld. Counsel appeared for the assessee and Shri K.M. Patwari, ld. JDR appeared for the department. 4. It is contended by Mr. Maingi, learned Counsel that processes of drilling, welding and fasting does not amount to manufacture and these goods do not become goods within the meaning of Sec. 2(d) of the Central Excise Act. He cites among other things the judgment of the Tata Engineering Locomotives v. CCE, 89 E.L.T. 463. He also states that fabrication and erection of structural steel shed on site is not manufacture and relies on the judgment of the Tribunal in the case of Pratap Steel Rolling Mills v. CCE - 1990 (48) E.L.T. 539. He also invited our attention to the judgment of the Karnataka High Court in Thungabhadra Steel Products Ltd. v. UOI - 1998 (98) E.L.T. 334 for the proposition that assembling of fabricated structure at customer s site would not amount to manufacture. He also cited several other decisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Fabricator has supplied 482.37 MTs of raw material in the form of steel plates, channels to various process and the same has been transferred to columns, roof girders, cladding runners, purlins etc. and the activity of this nature certainly amount to manufacture as it brings into existence of a new distinct product having its own name, character and used. The said new product are well known in the market and covered under the Central Excise Tariff Act and undoubtedly would attract duty.......... In the instant case various components/ parts by columns roof girders, cladding runner, purlins utilised in the erection of the site cannot be considered as an immovable property can be removed/dismantled as and when required. Various pronouncements cited by M/s. DES in respect of the arguments were not applicable. Further in page 11 of the order it has been stated that items like roof girders, purlins, trusses are well known in the market and are capable of being bought and sold". He cites the judgment of A.P. State Electricity Board - 1990 (70) E.L.T. 3 (SC). 7. When we look into it the facts of the case, the judgment of the Bombay High Court cited by the appellant in TELCO s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that just because a plant and machinery which fixed in the earth for better functioning it does not automatically become immovable property. But in that case the question decided was based on the question of fact decided by the Tribunal and also the Tribunal has held that somebody wants to purchase the whole machinery, it could be dismantled and sold to him in part. (Please see paras 3 to 6). Here the argument dismantling or selling in parts have not arisen. And, therefore, on the peculiar facts and circumstances of the case, the Supreme Court has held in that way. Moreover here it is not a case of mere embedding for operational efficiency. In our view huge steel structure which fixed on earth and the judgment of the Bombay High Court is squarely applicable to the facts of this case. The judgment of the Karnataka High Court in Thungabhadra Steel Products Ltd. v. UOI 1998 (98) E.L.T. 334 also deals with the same questions. And we also follow the judgment of the Karnataka High Court in the said case of Thungabhadra Steel Products Ltd. and which held in favour of the assessee. 9. Last but not the least an important factor in this case admittedly these products have been manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the components are first made in the factory and then the structure is created, which, at the stage of creation itself, is embedded in the earth. This was the view held by the Supreme Court in the case of Hyderabad Race Course as well as Mittal Engineering. The Supreme Court in the case cited by my Ld. Brother above has gone a step further and held that where the installation is for the sake of stability alone, then the machinery etc. would continue to be called goods inspite of being embedded in the earth. 13. In examining whether a particular structure is excisable or not, the department has to establish that the processes did amount to manufacture. Essentially, every manufacture from a nail to a motor car will involve the same processes namely cutting, shaping, punching, drilling, welding etc. and being put together by nuts and bolts. If these processes are held not to amount to manufacture, jointly or severally, then nothing produced in this country would be subject to duty. In each case it has to be shown by the taxing authority that the particular process did result in creation of new commodity known in the market separately from the inputs going into that commodity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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