TMI Blog2001 (7) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... MT of raw material from DVC, they issued the same to Rainbow; that M/s. Rainbow completed a substantial amount of fabrication and erection of tanks and water pipes by 20-6-1986; that a show cause notice dated 21-6-1991 was issued to them as well as DVC for demanding duty for the period from 31-7-1986 to 31-5-1991 in respect of water pipes and tanks of steel; that the Commissioner, under the impugned order, confirmed the demand of duty against them and imposed penalty on them as well as M/s. DVC, holding that impugned pipes and tanks were erected after fabrication and as such these are moveable goods; since ownership of the impugned goods passed from the fabricator to the DVC, marketability of the goods has been proved; C.W. Pipes are classifiable under Sub-heading 7303.29 upto 28-2-1988 and thereafter under Sub-heading 7305.90 of the Schedule to the Central Excise Tariff Act; tanks are classifiable under Sub-heading 7308.90 and 73.09 of the Tariff; that as the appellants have invested huge amount for security deposits, procured free supply of raw materials, fabricated and erected the impugned goods and received payment from DVC, they are liable to discharge duty leviable on the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bow are the manufacturer of the impugned goods as the appellants had entered into a sub-contract with Rainbow and it was Rainbow who had actually carried out the work of fabrication and erection of tanks and pipes at the site of DVC; that it is settled law that the supplier of raw material is not the manufacturer and the actual manufacturer is job worker; that they also paid job charges to Rainbow. He relied upon the following decisions:- (i) Ujagar Prints v. U.O.I. - 1988 (38) E.L.T. 535 (S.C.) (ii) CCE, Baroda v. M.M. Khambhatwala - 1996 (84) E.L.T. 161 (S.C.) (iii) Basant Industries v. C.C.E., Kanpur - 1995 (75) E.L.T. 21 (S.C.) (iv) Chief Engineer, PWD v. C.C.E., Chennai - 1999 (114) E.L.T. 753 (T) = 1999 (35) RLT 153 (v) Universal Filteration Co. v. C.C.E., Mumbai - 2000 (116) E.L.T. 103 (T) = 2000 (37) RLT 273 (vi) ORG Systems v. C.C.E., Vadodara - 1998 (102) E.L.T. 3 (S.C.) 4.2.The learned Advocate continued to submit that the Commissioner has not accepted their plea on the ground that the contract with Rainbow is of December, 1982, whereas the Purchase Order was placed on 23-11-1983; that the finding is not correct as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal taking a view that such immovable property is not exigible to excise duty - C.C.E. v. Dodsal - 1987 (28) E.L.T. 352 (Tribunal) and SAE (India) Ltd. v. C.C.E. - 1988 (36) E.L.T. 613. 5.3.Finally the learned Counsel mentioned that the quantification of demand is not correct; that the pipes will be classifiable under sub-heading 7303.27 and not under sub-heading 7303.29 for the period upto 20-2-1988 because these were made from hot rolled products; that with effect from 1-3-1988, the pipes fall under Heading 73.05 and read with Notification No. 175/88, duty chargeable will be only Rs. 800/- PMT; that further the rates adopted for working out the duty demand on tanks is the rate of 1991 which is Rs. 11000/- PMT whereas the work was done in 1983-86 when the rate was Rs. 6,000/- PMT; that in the show cause notice tanks were classified under Heading 7309; that the Adjudicating Authority mentions in para 5.2.2 of the impugned order that prior to 1-3-1988 tanks were classifiable under Sub-heading 7308.90 of the Central Excise Tariff; that as held by the Tribunal in Jyoti Laboratories v. C.C.E., Cochin - 1994 (72) E.L.T. 669 (T), this should be treated as a fresh notice for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ean that the inputs were manufactured by them. He also emphasised that the Commissioner has confined to the amount of duty demanded in the show cause notice. He also submitted that the demand is not beyond the period of five years at all; that relevant criterion is the use of the impugned goods; that making payment is not relevant at all for the purpose of determining the time limit as payment is made in advance also; that removal of the goods takes place only when the pipes are welded into pipe line. He further mentioned that extended period of limitation for demanding duty is invokable as the fact of fabrication was suppressed from the Department; that the Circulars of the Board, relied upon by the learned Advocate for the appellants, clearly mention that if after assembly the goods are not moveable duty is not to be charged; that however, circulars clearly mention that various parts and components used in the manufacture of erected articles would be liable to duty; that the circulars nowhere mention that components would not be chargeable to duty; that the circulars relate to machine/machinery and not pipes; that as the fact of fabrication was never disclosed to the department, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 (S.C.) has observed that "It was for the Tribunal to determine whether the structurals that the department sought to make exigible to excise duty in the various appeals before it were new, identifiable goods which were produced as a result of manufacture or processes and which are marketable". Thus the test of marketability or capable of being marketed is to be applied before any goods can be held to be exigible to excise duty. It has been claimed by the appellants that the tanks were fabricated stage by stage by welding hot rolled steel plates at the site and when the tanks came into existence, they were attached to the earth. The Revenue has not brought any evidence on record to show that the tanks were first fabricated and then they were attached to earth subsequently, to secure maximum operational efficiency and also for safety. We agree with the learned Advocate for the appellants that there is nothing in the Purchase Order to indicate that the tanks were erected after fabrication. Further passing of the ownership of the goods per se does not satisfy the test of marketability as even immovable goods such as land is also sold. In Municipal Corporation of Greater Bombay v. IO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e actual work of fabrication was carried out by M/s. Rainbow and not the appellants and M/s. Rainbow can not be considered as 'hired labour' of the appellants. It is settled law that a supplier of raw material does not become manufacturer by merely supplying raw material or getting goods manufactured according to his drawings or specifications. The Apex Court in many cases such as Ujagar Prints and Khambhatawala has held that the job workers are the manufacturer of the goods. The letters relied upon by the learned SDR do not make the appellants as manufacturer of the goods in question. These letters were addressed by DVC to Chief Executive of the appellants' Incharge of the Site. Merely because the appellant had a Site Incharge, it is by itself not sufficient to hold that the appellants are manufacturers. We also observe that letter dated 26-3-1990 of DVC, referred to by the learned SDR, makes a mention of appellants' contractor Rainbow having taken out their tractor and trolley. Further the fact that the appellants informed Rainbow being manufacturer after lapse of more than 9 years will not go against them as to treat them as manufacturer under the provisions of law. We, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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