TMI Blog2006 (4) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... actured and utilised for erection of their new sheds. During investigation, it was found that the appellants have got manufactured the above said structural steel articles at their own factory site for erection of new sheds by M/s. New Bharat Builders (Bombay) Pvt. Ltd. on job charge basis as per designs and specifications provided by the appellants. The raw material such as structural steel, nuts, bolts, etc. for manufacture of steel structural articles were purchased by the appellants and M/s. New Bharat Builders (Bombay) Pvt. Ltd carried out manufacturing operation with the aid of different machines through their own employees and job workers. Show cause notice was issued to the appellants that the structural steel articles fall under sub-heading 7308.90 of Schedule to the Central Excise Tariff Act and the appellants were required to pay central excise duty of P.s. 11,09,469.17. They have contravened the provisions of Rule 9(1) read with Rule 173G(1), Rule 52A, 173B, 173C and 173F of the Central Excise Rules by clearing the excisable goods without payment of duty and penalty was proposed on them under Rule 9(2), 52A and 173Q of the Central Excise Rules. Show cause notice was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t observing the formalities required under Central Excise Law. Penalty was also proposed on them under Rule 9(2), 173Q and 226 of the Central Excise Rules, 1944. Show cause notice was also issued to M/s. JCT, Phagwara for imposition of penalty on them under Rule 209A of the Central Excise Rules, 1944, on the ground that they acquired the pos session and were concerned in purchasing and keeping the excisable goods on which no central excise duty had been paid and they knew that same were liable to confiscation. The case was adjudicated by the Commissioner under the impugned order confirming the demand of Rs. 32,90,683.40 and imposing a penalty of Rs. 1,50,000/- on M/s. Amar Singh Company under Rule 173Q of Central Excise Rules, 1944. The charges against M/s. JCT Ltd. were dropped. Appeal filed by M/s. Amar Singh and Company against order of adjudicating authority was allowed by Tribunal vide Order No. 121-137/99-B1, dated 12-2-99. On departmental appeal against Tribunal's Order, the case has been remanded to the Tribunal for a fresh decision. Arguments of Appellants: 4. On behalf of the appellants, M/s. Mahindra Mahindra, it was argued that the appellants are not the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cifically replied that, "please note that for erection of new sheds in our premises, we are bringing MS Plates, channels, angles, rounds, etc. on payment of duty from the manufacturer thereof. These, at site, we are putting to functional use in the erection of sheds. We say that with the settled law of Excise as to what is manufacture etc. we are not doing any manufacturing activities to come under the purview of any Central Excise Tariff items in respect of erection of these sheds." 6. In support of their pleadings that since the excisability of the items was in dispute and the dutiability was not clear, proviso to Section 11A is not applicable. Reliance was placed on the following decisions (1) Jaiprakash Industries v. CCE, Chandigarh - 2002 (146) E.L.T. 481 (S.C.). In Para-6 'of the decision, it was held that, "for invoking the extended period of limitation duty should not have been paid, short levied or short paid or erroneously refunded because of either fraud, collusion, wilful misstatement, suppression of fact, or contravention of any provision or rules. This court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Mills, Phagwara for fabrication and erection of the factory sheds under direct supervision and day-to day control of M/s. JCT Mills. Prior to erection and fabrication of structurals a preliminary work was to make the foundation in respect of the sheds so that they could take heavy loads of the looms which were to be ultimately used in the sheds. M/s. JCT exercised extreme caution and detailed supervision. The appellant erected necessary immovable sheds in the factory premises of M/s. JCT for which they provided raw-materials viz, cement, steel, etc. The steel structurals work was carried out by the appellant to bear the very heavy loads. The members of the Steel Structural Works were columns, Trusses, beams, etc. While the appellant was engaged in fabrication of steel structurals, central excise officers visited the premises of M/s. JCT regularly and also made inquiries with the officers of M/s. JCT regarding the fabrication work. The appellants were never told anything by M/s. JCT and the officers were treating M/s. JCT as the manufacturer. Shri P.S. Jasir of JCT Mill in his statement dated 2-11-89 has categorically deposed that detailed procedure of construction was informed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Hon'ble Supreme Court in case of Collector of Central Excise v. HMM Ltd. [1995 (76) E.L.T. 497 (S.C.)], where it was held that limitation for extended period is not invokable unless the show cause notice puts assessee to notice specifically as to which of the various commissions or omissions stated in proviso to Section 11A(1) of Central Excises Salt Act, 1944 had been committed. Arguments of Revenue: 8. On behalf of Revenue, it was argued that the activity of fabrication of structurals like columns, purlins, trusses, etc. is a manufacturing activity as has been held by the Larger Bench of the Tribunal in the case of M/s. Mahindra Mahindra Ltd. v. CCE, Aurangabad Ors, [2005 (190) E.L.T. 301 (Tribunal-LB)] - Final Order No. M/537-51/2005, dated 18-11-2005 where it was held that structures or parts thereof mentioned in the perenthesis of heading were illustrating parts of structures namely, bridges and bridge-sections, lock-gates, towers, lattice masts, roots, rooting frame-works, doors and windows and their frames and thresholds for doors, shutters, bal-ustrades, pillars and colunms as well as parts of structures such as, trusses, purlins, columns, beam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Shri M.C. Chintamani of Mahindra arid Mahindra has stated that they will pay the duty. Since Mahindra Mahiridra has stated that they will pay duty whereas the New Bharat Builders (Bombay) P Ltd. had taken the labour contract, duty was demanded from Mahindra Mahiridra Ltd. In case of M/s. Amar Singh Company, the officers visited the factory on 2-11-89. By that time, the activity was over. Hence, period of five years is applicable for issue of demand. It was also stated that M/s. Amar Singh Company had manufactured the goods as has been held by the adjudicating authority in Para 3.15 and 3.16 of the order, hence they were held liable for payment of duty. 11. We have considered the submissions made by both the sides. We find that the appellant, M/s. Mahindra Mahindra Ltd. has raised the issue of their being not the manufacturer but M/s. New Bharat Builders (Bombay) Pvt. Ltd., who have actually done the work of cutting the raw materials into the parts of the steel structurals and then erecting these parts and assembling the sheds, are the real manufacturer. Both the appellants have claimed that demands are time barred on the around that at the time when they were erecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of structurals for erection of the shed and this position was decided by this Tribunal in case of Aruna Industries, Visakhapatanam V. CCE [1986 (25) E.L.T. 316]. The arguments raised in this case found favour with the Tribunal in various subsequent decisions holding that mere cutting, drilling holes and welding does not amount to manufacture. This impression was prevalent with the assessees as well as with the departmental officers. In such a situation, when the decisions of the Tribunal were in favour of the assessee, it cannot be said that they have suppressed the facts. On the contrary in both the cases, the assessees have informed the department regarding erection of the shed. Therefore, extended period for demanding duty cannot be made applicable under proviso to Section 11A of the Central Excise Act when the facts of receipt of raw materials, cutting the materials into various members for erection of sheds and - the erection of the sheds were intimated to the department. In the circumstances, when the appellants were under the bona fide belief that fabrication undertaken by them did not amount to manufacture based on the decisions of the tribunal no suppression of facts or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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