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CCE, Chennai Versus M/s. Beehive Foundry Engineering Works

2013 (11) TMI 876 - CESTAT CHENNAI

Classification of goods – supply of pre-fabricated building - Advelorem or Nil rate of duty - Whether the goods would be classifiable under Heading 7308 @ 16% advelorem or under Heading 94.06 at nil rate of duty – Held that:- The adjudicating authority observed that though the purchase order termed the supply as ‘supply of pre-fabricated building’, the actual supply made by the assessee are only structures - They were undertaking the work of erection of structure at site supplied by them, all ot .....

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ariff heading 94.06. - Decided against the assessee. - In respect of other purchase orders - Held that:- The classification as pre-fabricated building cannot be changed for the reasons that roofing sheets or walls were bought-out items or supplied by the buyer of the product - The classification has to be decided by the facts whether the goods manufactured are made to measurements of a building and that the components manufactured and supplied will give essential characteristics of a buildin .....

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ng all the purchase orders in proper manner - matter remanded back to the original authority to re-quantify the demand. - E/492/2002 and E/CO/201/2013, E/545 to 547/2002 and E/CO/143 to 145/2003 - Final Order No. 40334 -40337/2013 - Dated:- 26-8-2013 - Shri P.K. Das and Shri Mathew John, JJ. For the Appellant : Shri P. Arul, Superintendent (AR) For the Respondent : S/Shri R. Raghavan & M. Kannan, Advocates JUDGEMENT Per P.K. Das A common issue is involved in all these appeals and hence all t .....

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sed declaration under Rule 173B of the erstwhile Rules, 1944 declaring the said goods as pre-fabricated building claiming classification under sub-heading No. 9406.00 of CETA, 1985 at nil rate of duty. (iii) The respondent by letter dated 3.9.1999 addressed to the Assistant Commissioner of Central Excise informed that they were proceeding to clear the goods at NIL rate of duty under sub-heading No. 9406.00 as per revised declaration filed by them, as anything contrary was not heard by them. (iv) .....

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w Cause Notices were issued proposing demand of duty and imposition of penalty classifying the goods under Heading No. 73.08 of CETA, 1985 which attracted duty @ 16% advelorem against the clearance of goods of various contracts, as under:- S. No. Show Cause Notice No. & Date Period Contract of 1. 616/2000 dated 11.5.2000 2/2000 -4/2000 Godrej & Boyce Ltd., Ambattur 2. 516/2001 dated 30.3.2001 5/2000 -7/2000 Godrej & Boyce Ltd. Ambattur 3. 477/2001 dated 19.3.2001 3/2000- 8/2000 Godre .....

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ty after adjusting the amount of 8% on the value of the goods cleared at NIL duty by the respondents along with interest. The total amount of demand of duty in respect of five show-cause notices is Rs.23,57,543/- and penalty Rs.4,40,500/-. Commissioner (Appeals) set aside the adjudication orders and allowed the appeals filed by the respondents. Hence Revenue has filed these appeals and the respondents have also filed their cross-objections. 3. The learned AR on behalf of the Revenue reiterates t .....

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ted structures of iron and steel materials. He drew the attention of the Bench to the relevant portion of the Central Excise Tariff and HSN. It is submitted that the Commissioner (Appeals) had proceeded on the basis of purchase orders and had not considered the material on record that the respondents had not manufactured the pre-fabricated buildings at its factory. He further submits that the pre-fabricated structural materials cleared by the respondents from their factory were without walls and .....

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respondents reiterates the findings of the Commissioner (Appeals). He submits that it is apparent from the purchase orders that the fabricated items supplied by the respondents are pre-fabricated buildings. He submits that it is not an ordinary fabricated item. In other words, the fabricated items were manufactured as per drawing of the pre-fabricated buildings and removed in unassembled condition. It is also contended that as per HSN Note incomplete buildings unassembled with the necessary elem .....

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T 580 and also National Tube Industries Vs. Commissioner of Central Excise, Chandigarh -1999 (111) ELT 80 (Tribunal). He further submits that the adjudicating authority had overlooked the various purchase orders of different companies. It is submitted that the Commissioner (Appeals) had examined each and every purchase orders and thereafter allowed the appeals and therefore the impugned order is liable to be upheld. 5. After hearing both the sides and on perusal of the records, we find that the .....

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e, 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 or iron or steel. (ii) Note-4 / Chapter 94 of CETA, 1985 reads as follows:- 4) For the purposes of heading No. 94.06, the expression prefabricated buildings means buildings which are finished .....

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, sheds, garages and greenhouses are generally presented in the form of: - Complete buildings, fully assembled, ready for use - Complete buildings, unassembled - Incomplete buildings, whether or not assembled, having the essential character of prefabricated buildings In the case of buildings presented unassembled, the necessary elements may be presented partially assembled (for example, walls, trusses) or cut to size (beams, joists, in particular) or, in some cases, in indeterminate or random le .....

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rniture which are built in or designed to be built in (cupboards etc.) Material for the assembly or finishing of prefabricated buildings (e.g. nails, glues, plaster, mortar, electric wire and cables, tubes and pipes, paints, wallpaper, carpeting) is to be classified with the buildings, provided it is presented therewith in appropriate quantities. Presented separately, parts of buildings and equipments, whether or not identifiable as intended for these buildings are excluded from the heading and .....

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only structures. They were undertaking the work of erection of structure at site supplied by them, all other items of works were bought out items. The AC sheets which cover the structure are supplied by the customers themselves. The work order is not for a complete building but it is only for supply of pre-fabricated structure along with certain fixation work to be done at the site. 8. The Commissioner (Appeals) vide Order-in-Appeal dated 16.7.2002 after examining the purchase order observed as .....

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le in the assessable value even though supplied by the customer. Just because the impugned goods are supplied at NIL rate of duty, the department cannot separate the value of the supply of AC sheet. I find force in the above argument. On perusal of the drawing which is placed at page No. 61 of case records. I observe that the whole contract is only pre-fabricated building. Even though the AC sheets for the roof is supplied by the customer the contract says that the appellant is to fix the AC she .....

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perusing the work order as well as the diagram (placed at page 61 of case records) that the goods supplied by the appellant are only pre-fabricated building. In this regard, I do not agree with the findings of the lower authority in para 24 & 25 as the work includes the provisions for making the wall by the appellant with 0.5 mm TCT RMP coated galvanized steel glading sheet. Further, on perusal of the HSN Notes at P 1706 1707, I am of the view that walls is not an essential part of pre-fabr .....

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sion to fix the roofs as well as walls. 4. In the light of the above discussions, I hold the view that the impugned goods are pre-fabricated buildings only and are rightly classifiable under CSH 9406.00. The impugned order is therefore set aside. The appeal filed by the appellant company, is accordingly allowed. 9. We have also perused the purchase orders as under:- (i) Purchase Order dated 2.8.2000 of Children Education Society - Supply, fabrication and erection of 3 Nos. pre-fabricated buildin .....

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ed steel building for main factory at Viralimalai 3. Pre-fabricated steel building for furnace bay extension 4. Pre-fabricated steel building for steel bay extension (iv) Purchase order dated 22.12.2000 of C.R. Narayana & Co. Pre-fabricated building 12m x 24m learn on first floor of M/s. Sundaram Finance Ltd. (v) Purchase order dated 24.2.2001 of Godrej Agravet Ltd. -Structural work for Shrimp Feed Plant (vi) Purchase order dated 14.1.2000 of C.R. Narayana Rao- M/s. Godrej & Boyce Mfg. C .....

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e girders, trusses, purlins, bracings and glazing runners etc. complete with necessary base plates, gussets, cheats, HD bolts and nuts and joint bolts and nuts and painted with one shop coat of red oxide paint (3% of calculated weight of steel will be added towards bolts / nuts / rivets / welding and will be paid for at the quoted rate for steelwork). 410 MT 23,324.00 9,562,840.00 B -DISMANTLING & RE-ERECTION OF EXISTING ITEMS 10. It is seen from the appeal filed by the Revenue that the resp .....

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ed 24.2.2001 of Godrej Agrovet Ltd. is structural work for shrimp feed plant. Similarly, purchase order dated 14.1.2000 of C.R. Narayana Rao is construction of pre-fabricated steel building and cloaking for New Storage System Equipment Factory of M/s. Godrej & Boyce Mfg. Co. Ltd. But the schedule of the said purchase order indicates that the respondent would undertake structural steel work and Dismantling and re-erection of existing items which cannot be classifiable under Heading No. 94.06 .....

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act for manufacturing pre-fabricated building as per drawing and specification of the contract. On reading of Note 4 of Chapter 94 and HSN Explanatory Notes, it is clear that pre-fabricated building whether in assembled form or unassembled form and to be assembled at site, it would cover within Heading No. 94.06. Regarding the submission of the learned AR that every pre-fabricated building should have wall as a component, we find from the diagrams for the factory at Viralimalai, that the walls a .....

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lls of materials. In the present cases, it is seen from letter dated 10.1.2000 of the respondent that they supplied pre-fabricated cut to size as per drawing of pre-fabricated building together with other bought out elements, such as roofing sheets, side walls etc. and as per HSN Explanatory Notes, it would be covered within the Heading 94.06 as pre-fabricated building. So, the goods supplied in respect of the other purchase orders are rightly classifiable under sub-heading No.9406.00. We have n .....

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he manufacturing activity in relation to the drawings and specifications of the customer reveals that they manufacture and clear only prefabricated buildings in un-assembled condition and are not clearing panels in random and uncertain lengths. They clear panels in specific and exact dimensions along with accessories, which when assembled at site gives rise to buildings. Hence, the same is classifiable under Chapter Heading 94.06 only. Reliance was placed on the decision of the Hon ble CESTAT, W .....

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building and it has been specified that the design and fabrication of the building is to confirm to the relevant specifications of the customers. Therefore, it is clear that the order is for Pre-fabricated building only. 13. In the case of National Steel Industries (supra), the appellants entered into a contract for supply of 73 storage shelters and they had to supply pre-fabricated steel tubular shelters complete in all respects according to drawing and specification mentioned therein. The appe .....

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