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2009 (8) TMI 108

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..... ted:- 13-8-2009 - Ferdino I. Rebello and D.G. Karnik, JJ. [Judgment per : D.G. Karnik, J.]. - By this petition, the petitioner challenges the notice dated 26th June, 1990 issued to it to show cause why excise duty should not be levied and action be not taken against it for non-payment of excise duty for fabrication/manufacture of waste water treatment plant. 2. The petitioner is engaged, amongst others, in the business of fabrication and erection of structures of various types on contract basis. On 13th September, 1988, the petitioner entered into a turn key contract with Bharat Petroleum Corporation Ltd. (for short BPCL ) for fabrication, assembly and erection of waste water treatment plant. The activities involved in the contract were pro .....

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..... t. According to the petitioner, carbon steel tanks, various platforms, walkways and ladders are fabricated at site by process of rolling, welding, grinding etc. of duty paid steel plates, flats, angles, channels and beams. This fabrication is done at site. Civil work is also done at site and various parts are put together by embedding in the civil work and are affixed to the ground. Pressure testing is then carried out. The plant cannot function as such until it is wholly built including the civil construction. 4. In the affidavit in reply filed by Mr. Sunil Kumar Singh, Deputy Commissioner of Central Excise, the procedure given by the petitioner in the petition for erection and commissioning of the waste water treatment plant is not denied .....

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..... the completion of a manufactured product. Any process by which an object becomes a new commercial goods would be included in the definition of manufacture . However, simply collecting together at site the various parts would not amount to manufacture unless an excisable movable product (say a plant) comes into existence by assembly of such parts. In the present case, as the petitioner has stated that the waste water treatment plant does not come into existence unless all the parts are put together and embedded in the civil work. Waste water treatment plant does not become a plant until the process which includes the civil work, is completed. In our view, therefore, no commercial movable property came into existence until the assembling was .....

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..... interfere only on issuance of a show cause notice. However, the matter has been admitted in the year 1991. Eighteen years have passed after the petition was entertained and, in our view, it would not be appropriate at this stage to deny the relief to the petitioner on the ground that the petition is directed against the show cause notice especially when factually there is no dispute that the waste water treatment plant when totally assembled becomes an immovable property. The very show cause notice also says that plant in an unassembled form was installed and affixed to the civil works. This shows that the plant on erection and installation becomes an immovable property which is not excisable to tax. 8. For these reasons, we quash the show .....

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