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2015 (4) TMI 247 - MADRAS HIGH COURT

2015 (4) TMI 247 - MADRAS HIGH COURT - 2015 (320) E.L.T. 695 (Mad.) - Excisability of Signages which are erected at various petrol bunks of IOC - Circular No.58/1/02-CX dated 15.1.2002 - Whether Tribunal in [2009 (4) TMI 258 - CESTAT, CHENNAI] was right in upholding the order of the Commissioner treating the signages as movable property contrary to the clarification issued by the Board - Held that:- findings of the Commissioner as well as the Tribunal are that the signages are capable of movable .....

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hether the Board's Circular is binding - general proposition is given with regard to immovable final products. In the present case, both the Authorities have come to the conclusion that the final product is not immovable. Therefore the circular is of no avail to the appellant. - Decided against assessee. - C.M.A. No.1303 of 2009 & M.P.No.1 of 2009 - Dated:- 19-3-2015 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mrs. Pushya Sitaraman For the Respondent : Mr. K. Mohanamurali Standing Cou .....

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ises of the appellant? 2. Whether on the facts and circumstances of the case, the Tribunal was right in upholding the order of the Commissioner treating the signages as movable property contrary to the clarification issued by the Board?" 2. The brief facts of the case are as follows: On 23.1.2000, based on intelligence, the Officers of the Department visited the premises of the appellant and examined the records. The Officers found that the appellant/assessee had been manufacturing and supp .....

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ion and purchase of signages, two show cause notices were issued to the appellant as well as to the Managing Director of the company proposing to recover central excise duty and for imposing penalty. The show cause notice was issued in the following terms: " 14. Now, therefore M/s. Virgo Industries (Engineers) Pvt. Ltd, Chennai - 600 058, are hereby required show cause to the Commissioner of Central Excise, Chennai II Commissionerate, MHU Complex, 692, Anna Salai, Nandanam, Chennai - 600 03 .....

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4. b) A penalty should not be imposed on them under Section 11AC of Central Excise Act 1944 and Rule 173Q(1) of Central Excise Rules, 1944 and Rule 25 of Central Excise Rules, 2002. c) The interest on the duty amount should not be charged under section 11AB of Central Excise Act 1944. d) The seized goods valued ₹ 3,29,925/- as shown in the Annexure to seizure mahazar dated 25.9.2000 and later released provisionally should not be confiscated under Rule 173Q(1) Central Excise Rules 1944/Rule .....

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Authority has passed the following order: "1. I hold that Signages manufactured/assembled by M/s.Virgo Industries (Engineers ) Pvt. Ltd., No.43 Second Main Road, Ambattur Industrial Estate, Ambattur, Chennai - 58 are excisable and chargeable to duty. The Signages are classifiable under C S H 9405.90 and chargeable to appropriate duty of excise 2. I confirm and demand Central Excise duty of ₹ 98,20,679/- (Rs.Ninty eight lakhs twenty thousand six hundred and seventy nine only) and S .....

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ntral Excise Rules, 2002. M/s.Virgo Industries (Engineers) Pvt. Ltd., Ambattur, Chennai - 58 is however given the option to redeem the confiscated goods on payment of redemption fine of ₹ 1,00,000/- (Rupees One lakh only). This option is to be exercised within 3 months from the date of receipt of this order. 4. I impose a penalty of ₹ 99,05,053/- (Rupees Ninety nine lakhs five thousand and fifty three only) under Section 11 AC Central Excise Act, 1944 on M/s.Virgo Industries (Enginee .....

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go Industries (Engineers) Pvt Ltd., Ambattur, Chennai - 58. 7. I also demand interest under Section 11AB of Central Excise Act, 1944 on the duty determined paras 2 above." 4. Aggrieved by the said order, the appellant preferred an appeal before the Tribunal. The Tribunal, on the substantial issue dismissed the appeal. However, the Tribunal set aside the penalty imposed under Rule 173Q on the company and reduced the penalty imposed on the Managing Director of the company to ₹ 2.00 lakh .....

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ages and other items, such as, fibre glass reinforced plastic sheets, the vinyl sheets cut into signs, the electrical panels concealed within the signboard etc. got manufactured by third parties and that the signages proper had been erected at the various IOC bunks. It is the specific case of the appellant that at the premises of the appellant only sign poles were fabricated and the signages were erected using the components received at the various sites from their manufacturers. It is also the .....

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m as the final product was immovable and not goods. In support of their contention, the assessee relied on the following decisions: 1. Gold stone Engineering Ltd. Vs.Union of India 2005 (181) ELT 11 (AP) 2. Commissioner of Central Excise, Chennai Vs. India Pistons Ltd. - 1998 (104) ELT 494 (Tribunal) 3. Collector of Central Excise, Bhubaneswar Vs. Radiant Electronics Ltd. - 1996 (85) ELT 102 (Tribunal) 4. Triveni Engineering & Indus. Ltd. Vs. Commissioner of Central Excise 2000 (120) ELT 273 .....

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ther the signages erected at various petrol bunks of IOC were exigible to duty. The other factual issue that was considered by the Tribunal was whether the appellant had cleared complete signages in unassembled form to the sites or whether sign poles alone were cleared by the assessee from its factory and the remaining parts of signages got manufactured by it on job work basis were received at the respective locations directly from the contractors of Virgo for eventual erection. 10. The Tribunal .....

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nufactured as per the specifications of IOC, they dismantled and packed for convenience of transportation to various petrol bunks of IOC for erection. 11. These signages, according to the Adjudicating Authority and the Tribunal, fall under CSH 9405.90. To accept the adjudication order with regard to the assembly of the entire signage at the premises of the appellant, the Tribunal placed reliance on the statement of Shri.V.R.Prasad, Deputy Chief Inspecting Engineer of RITES dated 06.11.2000 and t .....

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Tribunal is that there was 'no chance of saying' that only parts of signages were taken to IOC outlets and assembled at site. He also states that assembled signages were dismantled for convenience of transportation to the respective sites where they were reassembled. It is also on record that as per mahazar dated 23.8.2000 drawn at the premises of Virgo, 10 numbers of main signages and 13 numbers of facility signages in fully assembled condition along with lighting poles, FRP components .....

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dated 22.7.2000, which says that 3 signages were transported from Chennai to IOC Vijayawada. This document is relied on for the purpose of showing that complete signages has been transported. The further reliance on the letter dated 27.2.1999 addressed to RITES by the Managing Director of Virgo shows that 330 signages were to be fabricated, inspected, transported and erected in an year's time. The various other documents that have been set out in the order of the Tribunal regarding the natur .....

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argument that erection was not done at the site, reliance was placed on the work order placed on M/s.Venkateswara Fibre Glass Industries dated 25.11.1999 and 25.1.2000, wherein it was stated that free delivery may be given at out works at Chennai - 58. All these documents were relied on by the Commissioner and the Tribunal to come to the conclusion that signages were sent in sets for erection at various sites, supported by erection report dated 13.7.2000. 14. In paragraph 9 of the order, the Tr .....

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ured at Virgo premises and the signages came into existence when the same were erected using also the components received directly at the site from their sub-contractors, the appellants have not succeeded in their effort in view of the documentary evidence pointing to a different factual situation as found by the Commissioner." 15. The statement of the Senior Engineer of RITES and IOC clearly justified the stand of the Department that they had manufactured the goods at the factory. By disti .....

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led by the Tribunal holding as follows: "We find that in the instant case the complete signage is movable and is installed by fixing it on a concrete foundation. These can be detached and shifted to another location without damaging them. The signage is fixed to earth like the paper machines considered in Sirpur Paper Mills Ltd. case. Signage is complete before fixing on the concrete platform. The facts of the judicial authorities relied on by the appellants are therefore different and thei .....

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ent stages of assembly and erection of signages. Undisputedly signages are capable of being assembled at the premises of the appellants and then transferred to the site to its erection after dismantling the same. The signages do not emerge as an immovable property on assembly or erection. They have base plates of steel with provision to fit them on bolts of the concrete foundation. These are not like a turbo alternator, parts of which are separately aligned and fixed on a concrete base to bring .....

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ready for erection at the factory and allowed deduction of transport cost alone. As a result of this finding, the Tribunal confirmed the impugned order demanding duty on the consideration realized by Virgo for manufacture and erection of signages. The Tribunal has also confirmed the demand of duty invoking larger period as well as penalty imposed under Section 11AC of the Central Excise Act. However, the Tribunal held the since penalty was imposed under Section 11AC, penalty under Section 173Q .....

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alt with what would constitute furniture and held as follows: "15. Thus, a perusal of the definitions given in various dictionaries shows that ordinarily 'furniture' refers to movable items such as desks, tables, chairs, required for use or ornamentation in a house or office. Thus, ordinarily furniture is not something immovable or something which is fixed in a position which can be removed only by cannibalizing. We agree with learned Counsel for the appellants that the latter are f .....

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overhead unit, rear and side unit, wall unit, pantry unit, kitchen unit and other items which are ordinarily immovable or cannot be removed without cannibalizing are not furniture. However, items like tables, desks, chairs etc. are furniture and hence excisable." 19. The facts in the present case are different. Here, the findings of the Commissioner as well as the Tribunal are that the signages are capable of movable and are installed by fixing it on a concrete foundation and can be detache .....

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