TMI Blog1996 (9) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... .90. The amounts of duty confirmed and the penalties imposed were as follows :- Order passed by Additional Collector dealt with in Appeal No.(1) E/1601/91B : Duty demanded Rs. 2,07,465.30 Penalty imposed Rs. 15,000.00 Order passed by Collector dealt with in Appeal No. E/5417/92B(2) : Duty Demanded Rs. 25,10,503.75 Penalty imposed Rs. 3,00,000.00 Shri A.N. Haksar, learned Senior Advocate stated that the case of the appellants is that the items in question on which duty demand has been raised in terms of the impugned orders are not manufactured goods to attract Central Excise duty. They have entered into a works contract with National Hydro Electric Power Construction Limited for construction of Power House Complex, Switchyard Power Tunnel and Civil Works at the Chamera Hydroelectric Project. In the course of executing their project, they fabricate Steel Ribs at site using the materials provided by their customers. The fabricated structures are attached to the earth in the tunnels and these are not goods to attract Excise duty. As regards the other item crushed stones from boulders, such an activity is not manufacture. There are judicial decision which support their ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no difference before or after the processes carried out. They have then stated that fabricated steel ribs are made by them as per the specific requirements of the structure under the project. These items are totally tailor-made and suitable for tunnel purposes and not at all capable of being bought and sold. These fabricated materials are marketable at all. They have then added that the ribs are used in RCC process for reinforcing the columns and beams for tunnel. They have relied upon the following decisions in support of their contention that fabrication of structural items does not constitute manufacture of a different product and does not attract excise duty. (1) Standard Industrial Engineering Co. v. Collector of C. Excise - 1988 (38) E.L.T. 196. Drilling and cutting that went into the making of purlins and trusses out of angles, channels and rounds is not manufacture. (2)Aruna Industries, Vishakapatnam v. Collector of Central Excise, Guntur - 1986 (25) E.L.T. 580 (Tri.), Fabrication and erection of structural steels not manufacture - Angles, Beams, Sheets were taken and put together in a new form what is called trusses, purlins etc. They come into being only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready become immovable. There was no structure that came into existence as steel ribs before they were constructed in the Tunnel. The joists remained as joists and they were not joined outside the tunnel to form a steel rib. 7.When the appeal had come up for hearing earlier, the Senior Departmental Representative had reported that the copy of the affidavit was not found in his file. A copy was then given by the other side. On going through the same, he had observed that the averments in the affidavit were different from the findings in the order as it was stated in the affidavit that the steel ribs were formed inside the tunnel as part of immovable property. He had requested for time to get clarification thereon from the Commissioner. The request was allowed and appeal came to be heard subsequently by us when the learned Senior Departmental Representative had no specific comments to make to rebut the contents of the affidavit. In the circumstances, we are inclined to accept the contents of the affidavit filed on behalf of the appellants. The present case is distinguishable from the ones relied upon by the adjudicating authorities as the goods in question therein had been manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Chapter 25 referred to earlier in this order. It was held that crushing, grinding and sieving of limestone to obtain limestone chips and powder amounts to manufacture. In an earlier decision in Gujarat Reclaim and Rubber Products Ltd. v. Collector of Central Excise Customs, Bombay reported in 1983 (14) E.L.T. 2401 the Tribunal had held that crushing of old Rubber into powder is manufacture. This of course was under the Tariff. In addition to these decisions cited before the authorities below, we find that there is a full Bench judgment of the Madhya Pradesh High Court at Jabalpur holding that the process of conversion of stones into gittis ballast and metal in crushers having given rise to a new commercial commodity amounts to manufacture. We would hold, on merits that the crushing of stones into small stones of size would constitute manufacture. Even while holding so we are of the view that the longer period of limitation would not be applicable as the issue cannot be said to have been free from doubt. The appellants would be entitled to the benefit of doubt. 10.We thus allow the appeal in regard to the demand of duty on steel ribs on merits and on the crushed stones on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y opinion, it is not proper to accept it, and allow the appeal barely on this affidavit, in absence of any verification of the facts. They had merely stated that fabrication of steel ribs did not amount to manufacture under Section 2(b) of the Act as it involved only cutting, welding, bolting etc. which were given shape as per drawing . It was stated then before Collector as per Collector's order that the ribs were fabricated by putting channels against one another and as a matter of fact those were not different from channel themselves. It was stated that resultant ribs were only stronger than the channels and there was no difference before or after the process carried out. They had also stated that steel ribs were ultimately used in construction work of Tunnel and, therefore, those became part of total whole structure, which was immovable property. The ld. Collector examined the issue and held that in view of the scope of Heading 73.08, it is wide enough to include such products which are prepared for use in structures irrespective of the type and nature of process undertaken for preparing such products for use as structures, hence he rejected the appellant's contention. I find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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