Customs, Excise and Gold Tribunal - Bangalore
Thyssenkrupp Industries India Pvt. ... vs Cce on 4 August, 2005
Equivalent citations: 2005(190)ELT337(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. In this appeal the issue is the excisability of Rail Mounted Stacker (RMS) erected by the appellants on turnkey basis at the Ore Handling Complex of Visakhapatnam Port Trust. Since the above equipment moves on rails, the Revenue did not accept the contention of the appellants that the goods are immovable and therefore non-excisable. Hence, the Commissioner in his Order-in-Original dated 30-12-2004 demanded a sum of Rs. 36,24,5987- under Section 11A of the Central Excise Act, 1944. Further he imposed equal penalty under Section 11AC and demanded interest under Section 11AB of the Act. A penalty of Rs. 25,000/- imposed on M/s. Visakhapatnam Port Trust. The appellants have strongly challenged the findings of the Commissioner.
2. Shri G. Shivadass, learned Advocate appeared on behalf of the appellants and Shri Ganesh Havanur, learned SDR appeared on behalf of the Revenue.
3. The learned Advocate made the following submissions :-
(i) The liability to Excise duty under Section 3 of the Central Excise Act should arise only if the activity carried out resulted in the manufacture of excisable goods. They should movable and capable of being brought to the market and sold.
(ii) The impugned goods, Rail Mounted Stacker (RMS) has imported at site as an immoveable property which is permanently fixed to the earth. The RMS was erected piece by piece on the rails which were permanently fixed to the earth by a specially made civil foundation. The RMS has only functional mobility on rails and it can never be taken out as such from the premises where it is erected. The RMS was not assembled as an entity in the first place before being placed on the rails. The RMS which included the wheel mechanism was as a matter of fact built on the rail which in turn was made on a strong civil foundation.
(iii) In various decisions by the Apex Court in the Tribunal it has been held that the plant and machinery which has come into existence as a result of erection and commissioning work at the site and which cannot be taken to market as such, is to be regarded as immovable property not liable to Central Excise duty. The following case laws were relied on:
(a) T.T.G. Industries Ltd. v. CCE, Raipur [2004 (167) E.L.T. 501 (S.C.)]
(b) Triveni Engineering & Industries v. CCE [2000 (120) E.L.T. 273]
(c) CCE, Chandigarh v. Damodar Ropeways & Construction Co. (P) Ltd
(d) Ganapati Ropeways Pvt. Ltd. v. CCE
(e) McNally Bharat Engineering v. CCE
(f) T.R.F. Ltd. v. CCE
(g) ACC Ltd. v. CCE
(h) CCE, Mumbai v. Josts Engg. Co. Ltd.
(i) Fenner India Ltd. v. CCE, Nagpur
(j) Virdi Brothers v. CCE, Indore
(k) Bhamt Gears Ltd. v. CCE, Mumbai-VI
(l) Bellis India Ltd, v. CCE, Chennai
(m) CCE, Chandigarh v. Vardhman Spinning Mills
(n) Wintech Taparia Ltd. v. CCE, Indore
(o) ACC Ltd. v. CCE
(p) Cethar Vessels Ltd. CCE
(q) Asea Brown Boveri Ltd. v. CCE, Visakhapatnam
(r) Otto India Pvt. Ltd. v. CCE, Raipur
(s) Palmtech Engineers Pvt Ltd. v. CCE, Bangalore
(iv) The RMS is immovable and incapable of being taken as such to any other place. If it is to be dismantled and taken to another place, nearly 70% of the material would be scraped. Even otherwise, if it is to be dismantled and taken, the test of marketability does not get satisfied. Reliance is placed on the following decisions :-
(a) Quality Steel Tubes Pvt. Ltd. v. CCE
(b) Mittal Engineering Works Pvt. Ltd. v. CCE
(c) Duncans Industries Ltd. v. State of U.P. and Ors. [2000 (88) ECR 19 (S.C.)]
(d) TTG Industries Ltd. v. CCE, Raipur [2004 (167) E.L.T. 501 (S.C.)]
(v) In the case of Nikhil Equipments Pvt Ltd. v. CCE, Pune, 1997 (95) E.L.T. 527, it has been held that storage system fitted to rails is immovable property and not liable to excise duty. This decision has been affirmed by the Apex Court in its decision reported as CCE, Pune v. Nikhil Equipments Pvt. Ltd., .
(vi) C.B.E.C. as per Circular dated 15-1-2002 has clarified that the goods assembled or erected at site and attached to the foundation to earth cannot be considered as movable property and therefore not excisable goods.
(vii) Alternatively, even if the RMS is considered as an excisable commodity falling under Chapter sub-heading 8428.90, the benefit of Notification No. 67/95-C.E., dated 16-3-1995 would be available to the appellants. Reliance is placed on the following decisions :-
(a) Triveni Engineering & Indus. Ltd. v. CCE, Allahabad, 2001 (136) E.L.T. 617 which has been affirmed by the Apex Court [2002 (139) E.L.T. A310 (S.C.)]
(b) Thermax Surface Coating Ltd. v. CCE, Chandigarh,
(c) Thermax Surface Coatings Ltd. v. CCE, Chennai-III, 2002 (148) E.L.T. 783
(d) Eicon Clipsal India Ltd. v. CCE, Ahmedabad-I,
(e) Asea Brown Boveri Ltd. v. CCE, Patna,
(f) CCE, Chennai v. Visveswaraya Iron & Steel Ltd., Final Order No. 692/2005, dated 3-5-2005] 2005 (192) E.L.T. 703 (T)
(viii) Since the appellants were under the bona fide belief that the RMS would not be liable to duty, it cannot be held that there was suppression of facts, with a wilful intent to evade excise duty. In their own case, it was held by the Tribunal in Final Order No. C.II/1046/2003-WZB, dated 12-5-2003 [2003 (155) E.L.T. 489 (T)] that turnkey projects executed by the appellants are not liable to excise duty. Hence penalty under Section 11AC is not justifiable.
4. The learned SDR reiterated the points in the Order-in-Original.
5. We have gone through the records of the case carefully. We have also seen the photograph of the equipment furnished by the appellants. The impugned goods have been assembled at site on the basis of turnkey projects. They have only very limited mobility. They are firmly embedded on a specific location. They cannot be transported elsewhere for use without damage the equipment. In that sense, the marketability test is not satisfied. The impugned goods are actually assembled at site with various components on which duty has been paid. The Stacker is Rail Mounted and the rails are fixed on firm civil foundation. The case laws cited by the appellants are very relevant. The Board's Circular dated 15-1-2002 is also applicable to the facts of the case. In these circumstances, we hold that the Stacker assembled by the appellants at their Ore Handling Complex is an immovable property even though it has limited mobility on the rails. Hence there is no justification for imposing penalty on the appellants. For the above reason, we allow the appeal with consequential relief.
(Operative portion of the order has been pronounced in the open Court on completion of hearing)