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TMI Blog2012 (8) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... cladding, bridge and staircase cladding, skylight structures such as roofs and roofing frame work, balustrades, hand railing for view bridge, aluminium composite panel cladding for pillars and columns, aluminium composite panels for bridge cladding all falling under Chapter Sub-Headings 7610 10 00, 7610 90 10, 7610 90 20, 7610 90 30 & 7610 90 90 of the Central Excise Tariff Act, 1985. 2.1 Intelligence received by the authorities indicated that AIPL had assembled structural glazing and aluminium joinery at the site of M/s. RMZ Corp Holdings Pvt. Ltd., Hyderabad without following the statutory formalities as per the Act and Rules made thereunder including payment of duty due. It was gathered that the assessee was awarded the works for structural glazing/aluminium joinery for a contract value of Rs. 2,39,00,300/- including all taxes, duties. The scope of work under the contract was for supply, fabrication, installation, testing and commissioning of structural glazing/aluminium joinery for ground floor, four upper floors, terrace and external works. After gathering evidence in the form of statements of various executives of the assessee and its client, a show-cause notice was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, and labour charges would not form part of the value of the aluminium angles supplied. Therefore, the amount collected from the customers towards design, engineering charges, erection & commissioning charges, labour charges and charges for supply of bought out items had to be deducted from the total contract price to arrive at the assessable value. 3. The Original Authority observed that the issue to be decided was whether aluminium sections and shapes being parts of the doors and windows, structures, etc. manufactured by the assessee were excisable, whether the various sites at which parts of structures were manufactured were factories and whether the demand was time barred. 3.1 The Original Authority found that Chapter Heading 76.10 included structures, parts of structures and articles prepared for use in structures. The process of cutting and drilling involved was a process of manufacture. These processes converted aluminium sections, etc. into parts of structure, which were products distinct from the inputs. He relied on the Explanatory Notes under Chapter Heading 73.08 of HSN which reads as follows : "The heading covers complete or incomplete metal structures a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iron and steel or wood will retain their identity, but it is precisely their being cut, and designed, punched and fitted to make an article commercially known that involves manufacture of an article distinct from angles, sheets, tubes etc., used in it. Mere drilling holes or mere cutting jobs in isolation may not by themselves involve manufacture of an article, but converting raw material like angles, tubes, plates etc., to bring about a distinct commodity will surely amount to manufacture as it is not "mere" drilling holes or cutting, but the activity is aimed at bringing about a distinct commodity..." 3.2 He rejected the claim of the assessee that the demand was barred by limitation. He held that the appellant had no basis to claim bona fide belief that the impugned goods were not excisable. 4. In the appeal filed before the Tribunal, AIPL reiterated the process of manufacture narrated before the lower authorities. In addition, the following pleas were raised. (I) In the disputed activity, no new commodity with a different name, character and use emerged. They relied on several judicial authorities in support of the claim that drilling/cutting of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not form part of the value of the aluminium angles supplied. Therefore, the amount collected from the customers towards design, engineering charges, erection & commissioning charges, labour charges, charges for supply of bought out items should be deducted from the total contract price to arrive at the assessable value. In this regard, the appellants relied on the decision in the case of CCE v. Milestone Aluminium Co. Pvt. Ltd. reported in 2007 (214) E.L.T. 417 (Tri.-Bang.). Further, Modvat credit of duty paid on the bought out aluminium articles should be allowed. This was without prejudice to the submission that no excise duty whatsoever was payable by the appellants. It was settled legal position that whenever retrospective duty demand was raised on the final product, the benefit of Cenvat credit of the duty paid on the items used in the manufacture of such final products should be extended and the act of non-following any of the procedural conditions/formalities should not come in the way of extending such benefit. (IV) It was submitted that even if the assessee was held liable to pay duty, the liability was only to the tune of Rs. 92,953/-. As the Department had issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o duty under Tariff Heading 76.10. 7.1 It is submitted that both the decisions of the Tribunal in AGV Alfab Ltd. v. CCE, Delhi-II [2005 (186) E.L.T. 451 (Tri.-Del.)] and M/s. Architecture Inc. [2005 (180) E.L.T. 166] cited by the assessee were no longer good law in view of the Larger Bench decision of the Tribunal in the case of Mahindra & Mahindra (supra). 7.2 The learned JCDR has excerpted parts of the above judgment in support of the impugned order. He submitted that the Larger Bench has distinguished the Ajit India Pvt. Ltd. case (supra) and decided the dispute against the assessee. It is further submitted that the Tribunal's decision in the case of Aluplex India Ltd. v. CCE, Navi, Mumbai [2006 (206) E.L.T. 960 (Tri.-Mumbai)] relied upon by the appellant did not apply to the facts of the case, as the same was concerned with levy of duty on curtain walls and whether the cost of erection and installation of curtain walls at site was to be included in the assessable value for the purpose of levy of excise duty. In the instant case, what was sought to be taxed were excisable goods in the nature of parts of pre-fabricated structure that came into existence at the site an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are manufactured goods liable to excise duty. If so, if the demand confirmed against the assessee invoking longer period has been validly made. There are also questions of the correctness of the quantification of duty liability and the penal liability of the assessee. During hearing, the learned counsel for the appellants had explained unitized glazing system and semi-unitized glazing system. In the unitized glazing system, the panel fabrication and fixing of the glass are done at the factory itself. Thereafter, the panels, which consist of the glass put in a frame, are shifted in pallet forms to the site where they are to be erected. In the semi-unitized glazing system, the appellant would first erect the scaffolding, wherein it would use steel rods for supporting the aluminium angles and glass which are required to be fixed on the building. Upon erection of the scaffolding, brackets would be fixed for holding the aluminum channels. Thereafter, the vertical and horizontal aluminium sections, which are already cut to size would be fitted into the said brackets, one after the other. Once the aluminum sections are fixed, the toughened glasses already cut to size are received. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or at some factory premises away from the site. The iron and steel raw material, such as angles, plates, tubes, etc., are used in making parts of structures and they acquire a distinctly different shape to suit the structural designs. For example, if iron or steel angles and plates are cut to make a steel table or chair which can be dismantled, it cannot be said that there are no goods manufactured because the iron and steel angles or plates remain such angles and plates though of different sizes, and merely holes are punched and screws fitted. Unlike in liquid mixtures, the raw material of iron and steel or wood will retain their identity, but it is precisely their being cut, and designed, punched and fitted to make an article commercially known that involves manufacture of an article distinct from the angles, sheets, tubes etc. used in it. Mere drilling holes or mere cutting jobs in isolation may not by themselves involve manufacture of an article, but, converting raw material like angles, tubes, plates etc. to bring about a distinct commodity will surely amount to manufacture as it is not "mere" drilling holes or cutting, but the activity is aimed at bringing about a distinct co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated buildings of heading No. 94.06) and parts of structures (for example, bridges, and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminium plates, rods, profiles, tubes and the like, prepared for use in structures." 11. Heading 73.08 reads similarly and is reproduced below : "73.08 : Structures (excluding pre-fabricated buildings of heading No. 94.06) and parts of structures (for example, bridges and bridge-sections, lock-gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns) of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron and steel." 12. Chapter Sub-heading 76.10 covers parts of aluminium structures such as doors and windows and their frames and thresholds for doors, balustrades, pillars and columns. It also covers aluminum plates, rods, profiles, tubes and the like prepared for use in structures. 13. In view of the Tariff Entry, the impugned goods are specifically c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processes and they are marketable." 16. As the assessee has been following judicial pronouncements to decide if the impugned goods were liable to excise duty, this particular judgment could not have escaped its notice. From this judgment, it is obvious that the impugned goods viz. aluminium structurals are covered by a tariff entry and would be exigible if they are identifiable goods. We cannot hold that the assessee would have required the exposition of relevant law in the Mahindra & Mahindra case to understand that the impugned goods are liable to excise duty. Consequently, the claim of bona fide belief advanced by the appellant cannot be upheld. We find that the appellant suppressed the fact of manufacture of aluminium structures in erecting the structural glazing system in the RMZ premises. Therefore, we hold that the demand is not barred by limitation. 17. As regards the limitation not being governed by the fact of the Department coming to know of the transaction involving evasion by the assessee, the ratio of the Neminath Fabrics case cited by the learned JCDR is apposite and relevant. In the said judgment, the Hon'ble High Court of Gujarat read the ratio of Niza ..... X X X X Extracts X X X X X X X X Extracts X X X X
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