TMI Blog2005 (10) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... hen to Bangalore city. They are registered as an assessee under the C.Ex Act, both in respect of their Tataguni Unit and Jakkasandra Unit and have discharged C.Ex duty in respect of goods manufactured at these units and complied with the statutory requirements. 1.3 The scope of the works contract was fabrication and laying of 1975 mm/1625 mm/1225 mm diameter M.S Pipes (also referred to as spools) fabricated out of 8 mm to 14 mm thick M.S Plates for the total length from T.K Halli to Bangalore connecting 2 ground level reservoirs. The contract included providing of transmission line appurtenances (like manholes, butterfly valves, scour valves, expansion bellows etc.) as per the drawing and specifications provided by BWSSB. The entire project was covered by two contracts. W4B and W4C projects were on contract awarded to the Appellants. The raw materials for fabrications was supplied by BWSSB. The Appellants had installed their own machinery and equipments in the land provided by BWSSB, which was designated as 'Fabrication Yard.' One at Tataguni and other at Jakkasandra, for W4B and W4C projects respectively. Duties were paid on the spools fabricated and subsequently also on 525 mm, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing structures i.e. base plates, steel pipes of 22 mm thick wall, pipes of 900 mm dia, Reducers with flanges etc. classifiable under sub-heading No. 7305.90 of the Schedule to CETA 1985 that all these items were cleared clandestinely, without accounting in their Daily Stock Account Register without payment of appropriate duty, that they had suppressed the fact of manufacture and clearances of such special pipes and other specials, that duty allegedly evaded in respect of such clearances made during the period from August 2000 to July 2002 worked out to Rs. 1,43,09,989/- in the case of the Show Cause for Jakkasandra and Rs. 23,09,473/- in the case of Tataguni Unit. The notices also proposed to impose penalty under various provisions of Central Excise Act and the Rules. 1.9 The Ld. Commissioner after considering the material passed the impugned order confirming the entire amount of demands except for an amount of Rs. 81,000/- and imposed penalties. The gist of the submissions made and the findings of the Commissioner are recapitulated as below : SR. NO. DESCRIPTION OF THE ITEM SUBMISSION THEREON FINDINGS OF THE COMMISSIONER 1 Ring Girders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngths of pipes cut from the duty paid pipes and hence not dutiable as no manufacturing activity involved. The RF pads are also segments cut from duty paid pipes. Mere cutting of smaller pipes from a longer pipe and cutting of a segment from the duty paid pipe held to be amounting to manufacture. 6 Manhole 525mm dia stub: The company admitted that it had manufactured about 21 metres of 525mm dia pipes and calculated the duty liability on the same and the amount was adequately covered under the ad hoc payment already No findings on these submissions. made. Contended that no further duty is payable on these stubs because there is no activity of manufacture involved. 7 Miter bends: (i) These are all such odd angled bends like 2, 17, 27, 35, 57 etc. which are not marketable and hence not dutiable. (i) Held to be marketable without any evidence being adduced. (ii) These are fabricated out of duty paid pipes. (ii) Though the payment of duty on pipes is not disputed, not considered this payment, thereby amounting to double levy on pipe value. (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Hence these appeals. 2.1 After hearing both sides and considering the materials it is found that, (a) there is no dispute that they had duly and correctly discharged their liability for payment of excise duty on the MS Pipes (also referred to as spools) fabricated by the appellants at their yards at Jakkasandra and Tataguni. The only dispute is whether the Appellants were liable to pay excise duty on certain transmission pipeline appurtenances, which were described as 'specials', and used in the execution of the pipe-laying project. (b) The Appellants have explained, in detail, the nature and use of the 'specials' in the execution of the pipe laying project. The case of the Appellants, as far the 'specials' is, that those were not excisable goods, as they were fabricated exclusively as per the designs and specifications provided in the contract between the Appellants and M/s. BWSSB and were only for use in the execution of the pipe laying project specific for the site. It is not the case of the department that the Appellants have been manufacturing and selling such items (specials) in the market. The position, that they were fabricated only for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such bends have to undergo hydro tests and it is practically impossible to conduct such test in the yard as it is not technically feasible. Since due to varying atmospheric temperature, there would be thermal expansion of the pipeline, which has to be accounted. Therefore such items have necessarily to be fabricated at the site. The adjudicator appears to have over looked this essential aspect of a technological necessity. This cannot be ignored. (iii) The fabrication of tanks at sites from bits and pieces of plates will not amount to manufacture, following the decision of this Tribunal in the case of Palmtech Engineer Pvt. Ltd. - 2001 (132) E.L.T. 492 (Bang.) Board's Circular No. 17/89 dated 21-4-1989 and the fact that such tanks are not part of the pipe lines as is not a finding of fact arrived. (iii) The department's case proceeds on an incorrect notion for example ring girders are being considered as nothing but pipes of 1975 mm dia of 22 mm thickness. They are basically a special pipe support on river bridges to accommodate the lengthier span of 12.5 metres. These supports are formed as a pipe component with additional stiffening, which will be anchored on the ham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner that all these goods came into existence in the yard of the Appellants cannot be upheld. In view of the confirmation Shri Tyagaraja of M/s. Venkateswara Engineering Works and other job workers on record; the goods fabricated at the premises of a processors job worker would be chargeable to duty as per the decision of the Constitution Bench in the case of Ujagar Prints - 1988 (38) E.L.T. 535 (S.C.) holding the Appellants liable for duty on the fabricated goods by the job workers therefore cannot be upheld. (f) There is force in the submission that the appellants were carrying out certain process for modifying for adoption of the pipes for specific use in the project as the pipe line has to pass through various directions and after adoption the pipes continues to be pipes for the purposes of carrying water and as per the definition of pipes under the C.Ex. Tariff. Therefore a mere change of physical shape and size for the purpose and need of specific configurations of the main pipe line would not meet the requirements of manufacture under the C.Ex. law. This position has been upheld by this Tribunal in the case of M/s. True Forge Pvt. Ltd. - 2003 (159) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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