TMI Blog2002 (5) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... der, Revenue has come in appeal. 2.Brief facts of the case are that M/s. Binny Limited Engineering Division, Madras are engaged in the manufacture of goods falling under Chapters 73, 84, 86 and 87 of the Central Excise Tariff Act, 1985. They had obtained contracts/purchase orders from various sugar mills to design, manufacture, procure and supply machinery, equipment and components etc. Perusal of records of M/s. Binny revealed that they had assembled at site different machinery parts such as weighing scales, juice heaters, sulphitation lunits, furnaces, evaporators, tanks etc. for M/s Vellore Co-operative Sugar Mills (M/s. Vellore) and M/s. Cheyyar Co-operative Sugar Mills (M/s. Cheyyar). These goods were supplied against purchase orders of the Customers. Since it appeared that the activity of fabrication and erection done at the sites of the above mentioned two sugar mills out of (1) structural items and machined steel castings manufactured in their factory and cleared to the site on payment of Central Excise duty under sub-heading 7308.90; 8138.00; 8479.00 8483.00; (2) Certain structural items manufactured at the site itself using sub-contracts out of the materials supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for evaporators, vacuum pans, sugar elevators and sugar graders as non-dutiable after observing that they were fabricated at the factory of M/s. Binny and cleared on payment of duty and no new product had emerged at the site of M/s. Cheyyar. In respect of parts and machines of sugar mills like Juice weighing scale and gross hopper which were assembled/erected at the site of M/s. Vellore Co-operative Sugar Mills, ld. Commissioner has held the same as dutiable since they were not in the nature of immovable property and also held the machinery like vertical crystalliser as non-dutiable in as much as the same was embedded to earth on assembly. The duty payable by M/s. Binny in respect of parts and machineries assembled/erected at the sites of M/s. Cheyyar and M/s. Vellore, which were held as dutiable by the Commissioner worked out to be Rs. 15,48,277/- and Rs. 1,47,448/- respectively. The Ld. Commissioner has treated M/s. Binny as the manufacturer of parts erected at the sites of M/s. Cheyyar and M/s. Vellore on which duty was liable to be paid, but on the question of limitation of time held that there was no case for invocation of extended period under Section 11A observing that M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and new items are manufactured by assembling/fabricating the same, it is well settled that the person who undertook such assembly is required to pay duty at site, by taking out C.E. Registration certificate from the proper officer having jurisdiction over the site which the assessee failed to do so. 6.On the question of limitation, Ld. DR argued that the extended time limit under Section 11A is still applicable in as much as the full information about the manufacture of goods at site was not furnished by the respondent to the department. The ratio that the extended time limit is applicable even if the price lists are approved in the cases where full information at the time of filing such lists was not furnished to the department has been upheld in the cases of Mysore Rolling Mills Pvt. Ltd. v. Commissioner of Central Excise [1985 (21) E.L.T. 875 (T)]; Food Specialities Limited v. Appellate Collector [1988 (33) E.L.T. 331] Elsons Machines Pvt. Ltd. v. Collector of Central Excise [1988 (38) E.L.T. 571 (S.C.)]. Ld. DR submitted that M/s. Binny, on their own, should have filed the necessary contracts with the department. But they chose to file the agreement dated 29-10-85 in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, erection/commissioning at site is not a manufacturing process as the goods were tailor made, become embedded to earth and hence immovable and not recognised as salable or marketable in the commercial parlance. They are, therefore, not to be treated as goods and attract no duty liability. In this connection, he relied on the decision in the case of M/s. Tata Robins Fraser Ltd. as reported in 1990 (46) E.L.T. 562 (Tri.). On the question of time bar, he submitted there was absolutely no suppression of information as the department was seized of the matter through RT-12s. Invoices filed by them to the department and by their production of necessary documents like invoices, contract copies, etc. to the local Audit and CERA parties at the time of their visit of the factory for periodical audit. In this connection, he drew our attention to the findings recorded by the Ld. Commissioner in para 17 18 of his Order wherein he has stated that the "respondent (M/s. Binny Limited) had been permitted by the Jurisdictional Assistant Collector to adopt invoice price assessment vide letter C. No. IV/16/6/89.T.5 dated 13-1-89, 27-3-89 and C. No. IV/16/155/ 89-VC, dated 29-1-90 for the different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture under Section 2(f) of the Act when both parts and final products are separately and specifically dutiable. In the case of Tata Iron and Steel - 1988 (33) E.L.T. 297 (Patna), the High Court held that to become goods the product must be something which can ordinarily come to the market to be bought and sold and is known to the market as a commercial product. On the question of excisability, however, it has to be determined that they are not affixed to the ground and are not in the nature of immovable property, which in the light of the definition in Section 2(f) of the Act would not qualify as excisable goods. It is in the light of these parameters that the excisability of the goods supplied by Binny to Vellore and Chayyar has to be determined. Thus, 10. in respect of goods supplied to Cheyyar, the following position emerges :- i. Juice/Water/Molasses Weighing Scales: Erected out of bought out components and those fabricated at site. Superficially affixed to the structure, movable and hence dutiable under Heading 8423.10. Value : Rs. 5,04,160. ii. Vertical Juice Heaters: Erected out of bought out and those manufactured by Binny. Superficially attached to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s goods at 11. serial Nos. (i), (ii), (v), (viii) (xiii) of para 10 supra, totally valued at Rs. 86,38,830 are dutiable. I find that for the total contract value of Rs. 2,59,35,972, Binny have paid Rs. 22,36,774 as charges for labour and raw material. This works out to 8.62% of the total value, on account of which an amount of Rs. 7,44,667 has to be added to the price of the goods to arrive at the assessable value of Rs. 93,83,497, duty on which @ 15% ad valorm and 10% SED on the BED would work out to Rs. 15,48,277. In 12. respect of machinery erected at the site of Vellore, I observe the following : - i. Juice Weighing Scale : Dutiable as discussed in para 10(i) supra. Value : Rs. 3,04,609. ii. Gross Hopper : Assembled at site out of duty paid goods cleared by Binny and components bought out from market. Superficially attached to concrete bed, movable and hence dutiable under heading 8479.10. Value : Rs. 5,28,412. iii. Vertical Crystallisers : Non-dutiable as discussed in para 10(ix) supra. Value : Rs. 21,80,925. 13. Thus the total value of dutiable goods supplied to Vellore works out to Rs. 8,33,021 (no additions need to made as the amount alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any penalty is legal and proper and has to be confirmed. 9. We also observe that the issue in regard to manufacture and erection at site is no longer res integra as it has been decided by the Hon'ble Apex court in the case of Sirpur Paper Mills v. CCE reported in 1998 (97) E.L.T. 3 (S.C.) wherein the Hon'ble Supreme Court had considered the case of paper making machine assembled and then erected at site with mainly bought out components and the Supreme Court had held that the item namely the paper making machine was marketable commodity and something quite different from the components that have gone into it and is therefore excisable goods and that embedding of the machine on to the earth on a concrete base is to ensure wobble free operation and does not make it immovable property. The machine was found to be capable of being sold in parts after being dismantled from its base. The Hon'ble Supreme Court had also distinguished this decision in the case of M/s Narne Tuleman reported in 1988 (38) E.L.T. 566 (S.C.). The assessee therein had carried on the work of assembling three components of weigh bridge and brought into existence complete weigh bridge which had distinctive charac ..... 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