Customs, Excise and Gold Tribunal - Delhi
M/S. Virdi Brothers vs Cce, Indore on 3 April, 2001
Equivalent citations: 2001(75)ECC673
ORDER
Justice K.Sreedharan
1. Appellants M/s.Virdi Brothers work as Refrigeration Engineers & Contractors. They instal cold storages as required by indenting owners. To instal cold storages they purchase compressors, electric motors, fittings, panels, pipes and tubes from open market. These components are, according to them, permanently fixed to the cold storage plant. No excise duty was being paid by them in relation to their activity of installing cold storage. Presumably on intelligence, show cause notice dated 6.12.99 was issued demanding Rs.63,65,580/- by way of duty. Appellant was also asked to show cause why penalty under the various other provisions of the Act and the Rules should also not be imposed. Various owners of the cold storages constructed by the present appellant were also issued with similar show cause notices.
2. Appellant disputed the claim put forth by the Commissioner in the show cause notice on the basis that various components used in the construction of cold storage were purchased from open market; that they were subjected to payment of duty at the hands of their manufacturers; that they were installed in the building with concrete foundation; and that cold storage is not movable item and so not liable to pay any duty under the Central Excise Act. All the contentions raised by the appellants were negatived by the Commissioner in Adjudication Order No.18/Commr/CE/2000 dated 31.10.2000. As per this order an amount of Rs.58,25,580 was confirmed as duty payable by the appellant. Same amount was imposed as penalty invoking the provisions contained in Section 11AC of the Act. For alleged violation of the provisions contained in Rule 173Q a penalty of Rs.10 Lakhs was also imposed. Interest under section 11AB was also levied. Various refrigeration plants constructed by the appellant were also ordered to be confiscated. Their owners were also directed to pay penalty of rupees one lakh each for having violated the provisions contained in Rule 209A of the Rules. The said order is under challenge in this appeal.
3. Main argument advanced by the Learned Counsel representing the appellant is that cold storage is an immovable property and so no provision of Central Excise Act can be pressed into service, much less duty claimed under that Act. In this view he prays for stay of operation of the order and also for waiving pre-deposit as contemplated by Section 35F of the Act. Learned Counsel relied on the decision of the Apex Court in Triveni Engineering & Industries Ltd. Vs. CCE 2000 (120) ELT 273(SC) for the proposition that cold storage is not a movable item coming within the purview of Central Excise Act.
4. We heard Learned Departmental Representative on the issue. According to him, Commissioner has not imposed duty on cold storage but has demanded duty on storage tank, cooling coil, compressor and condenser. They are movable items and so are liable to pay duty under the Central Excise Act.
5. It is appellants' case that storage tank, cooling coil, compressor, condenser etc. are purchased by him from open market. He was carrying out job work in constructing cold storage and as such he is not liable to pay duty under the Central Excise Act.
6. In paragraph 45 of the impugned order, the Commissioner observed -
"In view of above the refrigeration system is consists of storage tank, cooling coil, compressor and condenser. These components together, as discussed above, work as refrigeration system. In other words, these together perform the function of complete article, i.e. refrigeration system."
We are not in a position to agree with this observation made by the Commissioner as at present advised. Therefore, we feel that the appellant is having a prima facie case to contend that the imposition of duty and penalty as per impugned order is unjustified. Therefore, we waive pre-deposit as contemplated by Section 35F of the Act and order complete stay of recovery of the amount covered by the impugned order until further orders.
Post the appeal for final hearing on 16.5.2001.