TMI Blog2005 (3) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... on parlance as Turn Key Projects. That for such activity, the petitioner utilises certain components which are manufactured and cleared from its factory after bearing the duty under the Act, certain other items/components purchased from open market which are duty paid, and lastly, it carries on erection, fabrication and commissioning of the entire plant at the site as per terms of contract. It is the case of the petitioner that, in past, the respondent authorities had issued similar show cause notices in relation to (1) bought out items on which duty had been paid, and (2) on the process of erection, fabrication and commissioning of the project. That the petitioner having tendered its explanation by filing replies to the various show cause notices, the authorities had adjudicated upon the same and passed various orders-in-original as well as the order-in-appeal whereunder it was held by the authorities that the petitioner was not liable to pay any duty either on such bought out items or on the activity of erection, fabrication and commissioning of the project. In support of the aforesaid submission, at Annexure "A" (collectively) various such orders have been placed on record. A su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me issues. It was pointed out that the activity of commissioning a Turn Key Project was held to be erection of an immovable property and was not liable to excise duty under the provisions of the Act. That the earlier order of the tribunal between the same parties had been carried in appeal by the Revenue and the Apex Court had, in assessee's own case, dismissed the Civil Appeal filed by the Revenue. It was submitted that if the Court did not entertain the petition merely because it was at a show cause notice stage, it would result in multiplicity of proceedings, harassment to the petitioner and fruitless litigation in light of the aforesaid settled legal position. Though various other contentions have been raised in the alternative on merits of the matter, it is not necessary to enter into discussion of the same and hence, the said contentions are not re-produced and dealt with. 5.In support of the order made by the Tribunal, Mr. Nanavati invited attention of the Court to the provision of Sections 2(d), 2(f) and Section 3 of the Act, to submit that the definition of the term "excisable goods", the term "manufacture" and the "charge of duty" under the provisions of the Act would g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) and the contents of the circular were accordingly in consonance with the ratio enunciated by the Apex Court. He, therefore, urged that, in these circumstances, the petitions were required to be rejected. 6.1Inviting attention to the affidavit dated 9th March, 2005 sworn by one Shri Kantilal Ranchhodbhai Sengal, Assistant Commissioner, Central Excise, Anand, it was submitted that the reliance by the petitioner on decision of the Apex Court rendered in Civil Appeal No. 165 of 2000 was not correct and misleading. That the said appeal was filed by Commissioner of Central Excise, Chandigarh against CESTAT order Nos. 121-137/99 dated 12th February, 1999, [1999 (107) E.L.T. 337 (T)]. That in the said matter, the Apex Court had remanded the matter to the Tribunal for being heard and decided afresh. That the Department had filed Miscellaneous Application No. E/Miscellaneous/429/2003-NB(A) for a decision de novo, but the Tribunal had vide Miscellaneous Order No. 189/2004-NB(A), dated 27th August, 2004/22nd September, 2004 rejected the said application based upon the submission made by the petitioner with liberty to Revenue to approach the Tribunal again in case information tendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax, (1992) 193 ITR 321, the Apex Court has stated : "That, in the absence of any material change justifying the Department to take a different view from that taken in earlier proceedings, the question of the exemption of the assessee appellant should not have been reopened. Strictly speaking, res judicata does not apply to income-tax proceedings. Though, each assessment year being a unit, what was decided in one year might not apply in the following year; where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the orders, it would not be at all appropriate to allow the position to be changed in a subsequent year." 9.1This principle has been applied and followed by this Court in the case of Taraben Ramanbhai Patel v. Income-tax Officer, (1995) 215 ITR 323, wherein this Court has laid down : "The strict rule of doctrine of res judicata does not apply to proceedings under the Income-tax Act. At the same time, it is equally true that unless there is a change of circumstances, the authorities will not depart from prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals relating to coal handling plant, etc. it has been specifically submitted that these plants cannot be brought and sold in the market. Coal handling plant was a large assembly of machinery, buildings and structures spread over a vast area comprising mainly of wagon tripplers, conveyors, staker reclaimer, electric and manually operated hoists with trolleys, vibrators, built wares, switch gears, H.T. cables, transformers, etc. It has been explained along with photographs of the plant that it cannot be brought and sold in the market. We observe from the photographs produced during hearings that the plant consists of large civil structures, lengthy conveyor belts and civil structures to support such conveyor belts, called feeders, etc. spread over several hectares of land. It is not a case of machinery and plant being fixed to earth merely for vibration free functioning. They are immovable property......" ".....The test laid down in the Sirpur Paper judgment was whether the machine can be sold in the market. The coal handling plant cannot be brought and sold in the market and, therefore, is not covered by this decision of the Supreme Court......" "....The coal handling plant an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the large assembly of machinery, buildings and structures spread over vast area comprising mainly of wagon tripplers etc. and after going through the photographs produced before it, the Tribunal has found that the plant consists of large civil structures, lengthy conveyor belts and civil structures to support such conveyor belts, spread over several hectares of land; it is not a case of machinery and plant being fixed to earth merely for vibration free functioning. Therefore, as held by the Apex Court, these are findings of fact after appreciation of evidence before the Tribunal and in absence of any evidence, in fact, that is not even the case of Revenue, it is not possible to state that the Tribunal has overlooked any material fact or rendered a decision by considering any irrelevant material and ignoring any relevant material. In these circumstances, the case of the petitioner is fully concluded by the decision of the Tribunal in case of petitioner itself and the decision in case of Sirpur Paper Mills (supra) cannot carry the case of Revenue any further. Nothing has been brought on record to suggest that the aforesaid decision of the Tribunal rendered on 12th February, 1999 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o laid down in case of Sirpur Paper Mills Ltd. (supra). It has already been noticed hereinbefore as to how the said decision is not applicable on facts of the case. Secondly, the broad criteria laid down in the Circular are also not applicable. The Tribunal has, in the case of the petitioner itself, found as a matter of fact that the activity carried on by the petitioner does not result in manufacture or production of goods, and thus, there are no excisable goods. There is no marketability of the products. The Circular, therefore, even on the assumption that it could be pressed into service, cannot be invoked against the petitioner for the purpose of assessment, but to the contrary, has to be applied in favour of the petitioner. Lastly, the Circular is dated 2nd April, 1998 and the findings recorded by the Tribunal are on 12th February, 1999. In the circumstances, the Circular also does not carry the case any further. 16.Under the provisions of the Act, the taxable event occurs when "excisable goods" are produced or manufactured. The definition of the term "excisable goods" as given in Section 2(d) of the Act states "excisable goods" means goods specified in the First Schedule an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y "merchandise"; and by Johnson, who followed as the next lexicographer it is defined to be movable in a house; personal or immovable estates; wares; freight; merchandise." 16.Webster defines the word "goods" thus :- "Goods, noun, plural; (1) Movables; household furniture; (2) Personal or movable estate, as horses, cattle, utensils, etc., (3) Wares; merchandise; commodities bought and sold by merchants and traders." 17.These definitions make it clear that to become "goods" an article must be something which can ordinarily come to the market to be bought and sold." 17.1The position in law, therefore, appears to be well-settled that, to become "goods", an article must be something which can ordinarily come to the market to be bought and sold. 17.2Applying the aforesaid tests, in light of the facts found by the Tribunal, it is not possible to state that the petitioner was manufacturing goods when it erected or fabricated or commissioned the Coal Handling Plant. 18.Lastly, coming to the various submissions made on behalf of the respondents on the basis of averments made in the affidavit in reply, suffice it to state that it is a confusion of its own making. The deponent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been led on behalf of Revenue to show that Civil Appeal No. 165 of 2000 which came to be dismissed by the Apex Court on 19th April, 2001 along with various other appeals, was not against Final Order No. 812/99-A, dated 8th June, 1999 made by the Tribunal. In fact, the certified copy of the appeal produced by the petitioner belies such irresponsible averments. Therefore, in light of these facts, these contentions, being without any factual foundation, are rejected. It is unfortunate that an officer of the rank of Assistant Commissioner makes statements on oath without any supporting documents. 21.Before parting, it is necessary to express the anxiety of the Court in matters involving revenue. This petition was admitted as far back as on 13th September, 1999, but the affidavit in reply has been sworn on 9th March, 2005. When the matter came up for hearing on 23rd February 2005, a statement by Mr. Shaikh was made and the Court has recorded the same in the following words : "Mr. Shaikh, the learned advocate appears and states that he has instructions to appear on behalf of respondents. He prays for time to obtain papers and instructions. He is directed to file his appearance. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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