Customs, Excise and Gold Tribunal - Ahmedabad
Makson Pharmaceuticals (I) Ltd. vs The Commissioner Of Central Excise on 29 June, 2006
Equivalent citations: 2006(111)ECC743, 2006ECR743(TRI.-MUMBAI), 2006(202)ELT129(TRI-MUMBAI)
ORDER
R.K. Abichandani, J. (President)
1. This appeal is directed against the order dated 29.2.2001 of the Commissioner (Appeals) to the extent that it upholds the order-in-original.
2. The appellant has filed a note requesting for deciding the matter on merits by considering the grounds raised in the memorandum of appeal and the decisions referred.
3. The appellants had purchased water treatment plant under invoice dated 19.5.1995, which did not bear any details about the manufacturer, nor any duty payment particulars. According to the Revenue, the appellants had assembled the water treatment plant and, therefore, they were the actual manufacturers and the goods were liable to payment of Central Excise duty at 10% ad valorem.
4. The authorities below, on the basis of the material on record came to a finding that the appellant erected/assembled and commissioned the plant after purchasing various components and items from the local market and assembling them and thereafter fixed the same on a foundation. It was found that the purchase and erection of such plant was not reflected in the Central Excise records, and the appellant has suppressed the material facts, justifying invocation of the extended period. It was held that the plant was erected on 1.8.1995, and therefore, the show cause notice issued on 10.7.2000 was within the stipulated period of five years under Section 11A of the Act. The Commissioner (Appeals), referring to the Trade Notice No. 23/1998 of the Rajkot Commissionerate noticed the broad criteria laid down therein as per which plant and machinery, which was assembled and erected at site, was to attract Central Excise duty as leviable on the excisable goods. As per this criteria, the final product was required to be distinct and apart from the components that went into its production, the final product was "excisable goods" under the Central Excise Tariff; the goods embedded in earth were not to be necessarily treated as immovable property, if the whole purpose behind attaching to a concrete base was to secure maximum operational efficiency and safety, and that the goods marketable even though the article may have to be removed from its base and dismantled before being sold. It was held that treatment plant was fixed with a view to obtain its operational efficiency and safety. The Commissioner (Appeals) held that the demand was rightly raised especially when the components of the plant procured by the appellant from M/s. Delta Corporation exhibited that no Central Excise duty was paid on it.
5. According to the appellant, the charge of suppression could not be invoked as the goods under dispute were not manufactured but purchased. This submission is erroneous, because various parts of the treatment plant were purchased and assembled by the appellant and the marketable commodity, namely, water treatment plant was brought into existence by such manufacturing process by the appellant.
6. The contention that the extended period could not have been invoked is also erroneous, because the appellant had suppressed the fact of purchasing the components of water treatment plant and assembling them which constituted a manufacturing process. As noted above, the show cause notice was within the extended period of limitation.
7. It is clear from the facts on record that before the water treatment plant could be fixed on the foundation, it was required to be assembled, so that it could function as a water treatment plant. This is why all the required components etc, were purchased by the appellant so that they could be assembled into a water treatment plant, which was a marketable commodity. It could not only be fixed on a foundation, but could also be removed by retaining its character as a water treatment plant. When a marketable commodity such as water treatment plant comes into existence by assembling various components that go into its making, "excisable goods" come into existence and the mere fact that such goods are subsequently fixed on a foundation that will not remove them from the category of excisable goods in which they fell before being so fixed. This issue has been settled by the larger bench in Mahendra & Mahendra Ltd. v. CCE .
8. On facts as has been clearly found on the basis of the statement of the executive officer as well as keeping in view the nature of the water treatment plant, it was movable property that had come into existence, which was subsequently fixed on a foundation for its smooth working. As held by Hon'ble the Supreme Court in Sirpur Mills Ltd. v. CCE ELT 3 (SC), if the whole purpose behind attaching to a concrete bas is to secure maximum operational efficiency and safety in order to see that it does not wobble, the goods will continue to be considered as movable excisable goods and will not be treated as immovable properties. In view of the above settled legal position, reliance sought to be placed by he appellant on the decisions of the Tribunal in CETHAR Vessels Ltd. v. CCE Indore , Blue Star Ltd. v. CCE, Jaipur and Collector of Central Excise, Madras v. Shri Ram Chemical Complex and other citations referred to in the appeal memo, cannot assist the appellant. There is, therefore, no substance in this appeal. The appeal is dismissed.