Customs, Excise and Gold Tribunal - Tamil Nadu
Cethar Vessels Ltd. vs Commissioner Of Central Excise, Indore on 28 January, 2002
Equivalent citations: 2002(143)ELT336(TRI-CHENNAI)
JUDGMENT
S.L. Peeran, Member (J).
1. All these three appeals arise from a common Order-in-Original No. 57/CE/Ind/2000, dated 22-12-2000 by which the Commissioner of Central Excise, Indore has confirmed duty demands and imposed penalty on all the three parties. In terms of his adjudication order and findings recorded by him, the appellants namely Cethar Vessels brought into existence movable property namely boilers which were required to have been discharged duty under Heading 8402.10 of CET and as the same has not been done, the same is required to be confirmed along with penalties as noted by him in his order. The findings recorded by the Commissioner in Paras 14 to 22 is reproduced herein below :-
"14. I have carefully gone through the records of the case, defence replies of the Noticee Nos. 1, 2 & 3 and arguments made by them at the time of personal hearing.
15. Noticee No. 1 M/s. Cethar Vessels Ltd. Tiruchirapalli are engaged in the manufacture Boilers and parts/components thereof covered under subheadings 8402-10 and 8402.90 respectively. Noticee had entered into contract with Noticee No. 2, M/s. Bridgestone ACC Ltd., Pithampur for supply of two boilers. The Noticee No. 1 have manufactured and supplied some parts of the boiler while some other parts essential for the purposes of Boilers were procured from the other suppliers. The various components procured and received at the site of Noticee No. 2 from two sources as discussed above were assembled/erected at the premises of Noticee No. 2. This work of erection/installation and commissioning was also completed by the Noticee No. 1. The allegation in the show cause notice is that the various components following their assembly/erection has resulted into a Boiler of Chapter Heading 8402.10 which is different from the components that have gone into the assembly. Therefore show cause notice under consideration proposes recovery of duty on the boiler manufactured by the Noticee No. 1 at the site of Noticee No. 2.
16. Noticee No. 1 submitted that they undertake contracts for erection of Boilers all over India. For this purpose they are manufacturing and removing components of Boilers and also procured at the site of erection of boilers some other components. As supply of various components by them is against specific order of boiler, they have classified the goods cleared by them as boiler under Heading 8402.10 of the Central Excise Tariff Act. For this purpose they have filed declaration under Rule 173B, with the local excise authority having jurisdiction over their unit and authority has approved such classification made by them. Classification of the components as boiler has been made in terms of Board's Circular No. 4/92, dtd. 19-5-92 issued under Section 37B of the Central Excise Act, 1944 (Noticee has produced a copy of said Circular in support). Noticee has submitted that the goods cleared by them have been assessed as boiler under Heading 8402 as such there is no question of their or again liability under Heading 8402 as boiler erected at the site of their customer i.e. Noticee No. 2. Noticee further submitted what they have manufactured and cleared is boiler in CKD/SKD condition and as a result of their activity of erection/installation boiler has came into existence. Therefore no new product came into existence, at the site of their customer.
17. Noticee further submitted that the Board's Circular No. 4/92 (supra) relates to the period 1992, however matter was again taken up with CBEC when Chapters 84 and 85 under went a change by creating a separate entry for parts in each of the headings in the chapter. It was clarified by the Board that notwithstanding the fact, there are separate entry for parts appearing under Chapter 8402 still if the contract is for 'Boilers' and supply is in SKD/CKD condition, the assessment shall be continued as 'Boilers' as has been clarified by CBEC Circular No. 4/92.
18. From perusal of the Circular No. 4/92, dtd. 19-5-92 it can be seen that it was issued with reference to the representation made by M/s. Cethar Vessels Ltd. (Noticee No. 1). Noticee had represented the Board that they have been denied the benefit of exemption under S. No. 15 of the table annexed to Notification No. 205/88-C.E., dtd. 20-5-88 inasmuch as
(a) Only assemblies/ components are being cleared by them.
(b) The FBCBS (Fluidised Bed Combustion Boilers) can also work on other Fuels though designed for fuels like agricultural or municipal waste.
It was submitted by them that FBCBS are generally cleared in unassembled or disassembled condition by following any or all of the procedures as indicated below :-
(a) Supply pressure parts like boiler drum/shell, furnace, economiser, super heater, fluidised bed combustion system comprising of in bed tubes, air box, fluidising air nozzle, fuel feed nozzle, feed line etc. from the factory of the manufacturer.
(b) Supply standard bought out items like pumps, fans, motors, valves, cables etc. direct to site from vendors or receive the same at the stores and send it along with the manufactured components to site.
(c) Structural which act as support for mounting pressure parts and ducting which act as an enclosure to convey the fuel gas from one heat recovery area to the other, manufactured by subcontractors and dispatched along with the factory manufactured components to site or direct to the sub- contractors to send these items to site directly or fabricated at site.
(d) Carryout civil work necessary to hold the structures and erect these components one by one, provide electric and water connection.
With reference to above representation Board had issued above Circular dtd. 19-5-92 which reads as "The Board has carefully considered the issue of classification and levy of duty of excise raised above, and the provisions of exemption Notification No. 205/88-C.E., dtd. 20-5-1988 and has considered that it is necessary or expedient for the purposes of ensuring uniformity in the classification of excisable goods and the levy of duty of excise on boilers, designed for agricultural or municipal waste as also conventional fuel, and in exercise of the powers conferred under Section 373 of the Central Excises & Salt Act, 1944 (1 of 1944) the Board hereby orders that-
(a) Benefit of Notification No. 205/88-C.E., dtd. 25-5-88 (earlier Notification No. 120/81-C.E., dtd. 15-5-81) will be available to such goods, even when these are cleared in CKD/SKD conditions provided that evidence is produced that goods cleared form part of a complete device, and the evidence is also produced for supply of such a device to the buyer.
(b) The said goods is designed for converting agricultural and municipal waste for producing energy though conventional fuel can be used."
From above it is evident that above circular was issued with reference exemption Notification No. 205/88-C.E., dtd. 25-5-88 and it clarifies about classification of goods cleared in CKD/SKD condition for the purpose of exemption Notification subject to fulfilment of condition. Even otherwise above circular clarifies about classification of components under heading of Boilers, for the purpose assessment. Therefore irrespective of classification of goods under 8402.10, the facts remains that what is cleared is component and not a boiler. Therefore, Noticee's contention that what they have cleared from their unit as boiler is not correct. They have in fact cleared components of boiler by classifying them under Heading 8402.10. Noticee themselves have admitted that assembly of components supplied by them and those procured from other supplier had resulted a boiler at the site. Commercially also goods assembled at site i.e. boiler is different from the components that has gone into its production and it is covered under Heading 8402.10 of the Central Excise Tariff Act, 1985. The assessment of goods cleared from the factory of Noticee No. 1 was in respect of components of boiler while present show cause notice speaks about assessment and demand of duty in respect boiler it self, which are different from each other. Therefore contention of the noticee that when assessment under Heading 8402 when goods had left their factory, there cannot again assessment under same heading is not correct.
19. Noticee referring to various decisions has also submitted that what emerges at site i.e. boiler is not goods inasmuch as it is immovable and incapable of being marketed and therefore not excisable goods. In this connection, I find that Hon'ble Supreme Court in case of Triveni Engineering & Ind. Ltd. v. CCE , 2000 (120) E.L.T. 273, has clearly observed that mobility and marketability has to be ascertained from the facts and circumstances of each case. In the present case Shri Clement V. Sammnat site Engineer of Noticee No. 1, who had supervised erection installation of boiler in his statement dtd. 25-2-98 recorded under Section 14 of the Central Excise Act, 1944 have clearly stated that the boiler was installed on the foundation through foundation bolts. The rest of the accessories, fittings are either bolted or welded and the boiler assembly can be dismantled and removed outside the factory of M/s. Bridgestone. From above it is evident that the boiler on which duty is proposed for recovery is not an immovable property as submitted by the Noticee. The article in question is an excisable goods inasmuch as it is movable and marketable one. Therefore Excise duty as proposed in the show cause notice is correctly recoverable on the said goods.
20. Noticee has also referred to Supreme Courts decision in case of Thermax Ltd. v. Collector of C. Ex., 1998 (99) E.L.T. 481 (S.C.). The above referred case in not applicable to the facts and circumstances of the present case inasmuch in the said, Thermax case dispute was regarding valuation of the high pressure boiler process heat equipment manufactured and supplied by the appellant, while in the present Noticee has. manufactured and supplied some components of the boiler and with assembly these components along with some bought out component completed the boiler which came into existence for the first time at the site of customer. As the fact in present case are different from the matter before Supreme Court, decision referred by the Noticee above decision is not applicable.
21. From foregoing it is evident that the complete boilers as such come in existence at the site of Noticee No. 2. This was as a result activity of Noticee No. 1. Which amounts to manufacture. The article in question i.e. boiler is movable and marketable and therefore, chargeable to duty. Duty not paid by Noticee No. 1 is therefore recoverable from them. Since the Noticee has not disclosed about their activity, extended period of limitation provided under Section 11A(a) is attracted for recovery and penalty under Section 11AC is also imposable. Noticee by their act of failure to discharge duty on excisable goods manufactured at the site of Noticee No. 2 have violated various provisions as such they are also liable for penal action under Rule 173Q of the Central Excise Rules, 1944.
22. Activity about manufacture of article in question was carried at the premises of Noticee No. 2 knowing the fact that no duty was paid, on the boilers manufactured at their site, Noticee No. 2 have dealt in goods which are liable for confiscation, therefore Noticee No. 2 also deserve for penal action under Rule 209A of the Central Excise Rules, 1944. Noticee No. 3 Deputy Manager, Excise is handling the work of Noticee No. 1 related to excise matter. He had asked in manner if furtherance of the act of Noticee No. 1, is not discharging the duty on boiler, which is liable for confiscation. Therefore, Noticee No. 3 also deserves for penal action under Rule 209A of the Central Excise Rules, 1944."
2. Arguing for the appellants Id. Counsel Shri R. Raghavan and J. Shankarraman submit that they have taken a time to file appeal before this Bench in view of the fact that one of the appellants, i.e. Cethar Vessels Ltd. is located at Trichy. They contend that Cethar Vessels Ltd. had obtained contract for supplying in CKD/SKD condition boilers to Bridgestone ACC India Ltd. and for erection of the boilers at their premises at Indore. They had cleared the same on payment of duty by classifying the components of the boiler and parts/components thereof under sub-headings 8702.10 and 8402.90 respectively. The statement of the Site Engineer Shri Clement V. Samuel on 25-3-98 has clearly stated that the boiler had been installed on foundation through foundation bolts piece by piece and what came into existence was an immovable property. On being dismantled, the boiler loses its original condition and would become a scrap. It will not be in a position to remain as boiler on dismantling as boiler cannot come into existence without a foundation and being erected as an immovable property. The appellant had taken a plea that as they had already discharged duty on the CKD/SKD condition in the same heading under which the department intended to re-classify, the question of discharging duty again does not arise as what came into existence was an immovable property. Ld. Counsel pointed out that the Board's Circular was specifically issued under Section 37B in respect of Cethar Vessels Ltd. which the Commissioner has attempted to distinguish in the order. The same cannot be done. He referred to the latest Board Circular on this very issue in which the Board has now clarified that in the light of the Apex Court judgments that once an immovable property came into existence on erection, it cannot be considered as dutiable. He submits that the show cause notice is dated 16-6-2000 and the period involved is March, 1997 and February, 1998. He contends that there is no suppression in the matter as all the boiler parts in CKD/SKD condition had been removed on payment of duty and erection was taken place with the knowledge of the department and hence even otherwise, the demands are time barred. They further contend that even in a extreme case, they are eligible for deductions of duty which has already in built as all the clearances have to be treated as cum duty in terms of Larger Bench judgment rendered in the case of Srichakra Tyres Ltd. as reported in 1998 (108) E.L.T. 361. They further submit that as duty had been paid on the various components, denial of Modvat credit is also not justified. If these arguments are taken into account, there will be no duty liability in the matter.
3. Ld. Advocates contend that the issue is covered by the judgment of the Tribunal rendered by the Hon'ble President Justice K. Sreedharan in the case of Virdi Brothers v. CCE, Indore [2001 (132) E.L.T. 86] wherein the Tribunal taken into consideration the Apex Court judgments clearly held that construction of Refrigeration plant utilising duty paid bought out items, does not amount to manufacture as no marketable commodity having come into existence, therefore being an immovable property, it is not marketable and the same cannot be subject to excise duty. Ld. Advocate submits that the issue was gone into in great detail by the Apex Court in the case of Triveni Engineering & Industries Ltd. v. CCE [2000 (120) E.L.T. 273 (S.C.)], it has been laid down that the item on construction should also be movable and marketable and only then, it can be considered as excisable. He contends that the boiler which came into existence was as an immovable property and it loses marketability as it is no longer movable, hence the judgment of the Apex Court in the case of Triveni Engineering & Industries Ltd. clearly applies and is not distinguishable. He submits that the Tribunal in the case of Silical Metallurgic Ltd. v. CCE, Cochin [1999 (106) E.L.T. 439] went into the question of erection of electric are furnace constructed and installed at site and held that the said furnace is an immovable property and incapable of being brought to the market for being bought and sold, hence it cannot be treated as excisable product.
4. Ld. Advocate points out to the papers filed by SDR today which refers to the note filed by Deputy Commissioner, Trichy, the note encloses invoices of the appellant indicating clearly the duty paying nature of the goods supplied by the Cethar Vessels to Bridgestone ACC India Ltd. Therefore, their plea that duty paid boilers and its parts had been cleared in CKD/SKD condition is not disputed. He submits that the issue being fully covered by the judgments and Board's circular, the appeals are required to be allowed.
5. He further submits that representative in the case of M/s. Bridge-stone ACC India Ltd. had appeared on the date of hearing on 19-12-2001 and 17-1-2002 on which date he had requested that their appeal be considered on merits. He submits that there was no violation committed by Bridgestone ACC India Ltd. as the entire work of erection was carried out by Cethar Vessels Ltd. on their behalf as immovable property. Hence, the penalty of Rs. 1,00,000/- on Sundarrajan is also not sustainable as he has not committed any offence under Rule 209A of the Act.
6. Ld. SDR takes us through the findings of the Commissioner, especially para 19 wherein the Commissioner has noted the statement of the Site Engineer that boiler was installed on the foundation through foundation bolts and to the further findings that the rest of the accessories, fittings are either bolted or welded and the boiler assembly can be dismantled and removed outside the factory of M/s. Bridgestone. Therefore, the Commissioner has rightly concluded that the boiler on which duty is proposed is not an immovable property and it is a movable property and marketable one. He submits that with regard to the plea of Modvat, the matter has not been examined by the Commissioner as no such pleas were raised before him including the aspect pertaining to cum duty under Section 4(4)(d)(2) as can be seen from the impugned order and therefore, the matter is required to be to re-adjudicated. He submits that there is clear suppression in the matter as the activity of installation in the premises of Bridgestone was not disclosed and hence for that reason, larger period was attracted including penal provisions which calls for confirmation of demands.
7. On a careful consideration of the submission, the following facts are not disputed by the Revenue :-
(a) That Cethar Vessels Ltd. had cleared the boiler in SKD/CKD condition including its accessories on payment of duty. Ld SDR has filed today before the Bench copies of invoices pertaining to the clearances made by Cethar Vessels to Bridgestone ACC India Ltd. for erection of boilers. The description in the invoices clearly discloses that "supply of 7 TPH boiler -1 No. 1750.00 Kgs. and valued at Rs. 2,03,715.76 and rate of duty has been shown as 18%. Further excise invoices have also been filed with regard to the supply of structurals and the details of its weight, value and percentage of duty have also been shown. From the above, the duty paying nature of the boilers sent in SKD/CKD condition is, therefore, not disputed.
(b) The fact that the Bridgestone India had placed orders on Cethar Vessels Ltd. for erection of boilers at the site is an admitted position and based on these facts the proceedings have been initiated.
(c) It is also not disputed that Board has issued a Circular under Section 37B, particularly for Cethar Vessels only.
(d) The question, therefore, is as to whether the erection of boilers at site has brought into existence an immovable property or not ?
8. As can be seen from the extracted portion of the order, the Commissioner has noted the statement of Shri Clement V. Samuel, Site Engineer who has clearly stated that the boiler was installed on the foundation through foundation bolts. What is now required to be seen is as to whether after its erection when the boiler comes into existence ? Whether it is an immovable or movable property ? The Id. Commissioner further noting his statement has concluded that it is not an immovable property. When he says so, he ought to have relied on evidence which should have been in the nature of a rebuttal one to the plea taken up by the appellants that on erection it becomes part and parcel of the foundation structure and that it is an immovable property. There is no rebuttal evidences and it is only a conclusion drawn by the Id. Commissioner that it is marketable and movable. The test is laid down in the case of Triveni Engineering & Industries Ltd. wherein the Apex Court has clearly laid down that on erection, the items -should continue to remain as goods and should be marketable. Once it is erected and becomes part of the structure and is not in a position to be marketed, then it loses the test of marketability and movability and the item is required to be considered as an immovable one and non-excisable. This test was applied in the case of Silical Metallurgical Ltd. [1999 (106) E.L.T. 439 (T)] with regard to the erection of electric arc furnace constructed and installed at site. The Tribunal after due consideration clearly concluded that once the boiler becomes a structural and on removal it becomes a scrap, then it has to be treated as an immovable property. The relevant findings in Paras 6 to 9 of this order is extracted herein below :-
"6. On a careful consideration of the submissions it is clear that this Furnace had not been manufactured in any factory in an assembled form and taken to the site for erection. As can be seen from the facts which are not disputed, the Electric Arc Furnace had been constructed and installed at site and it consists of (i) central pillar bolted to the foundation embedded to the earth by civil works at a depth of 15 feet, (ii) the axis on which the furnace with rotation mechanism and the wheels and rail arrangements etc. and (iii) the furnace constructed brick by brick in a steel shell and rammed with carbon paste. The foundation, the bolting arrangements to the foundation, the railings as well as the wheels form integral parts of the sub-merged Electrical Arc Furnace. It is strongly contended that the bricks are laid like a Kiln, brick by brick in a steel shell and rammed with carbon paste and the entire mass is baked by burning and heating for 20 days. It is seen that these facts and the manner in which the Furnace has come into existence has not been disputed by the lower authorities. The construction of the Electric Arc Furnace has taken place simultaneously with the civil work and the foundation has not acted as a base for laying the machinery. The observation of the Commissioner (Appeals) that the foundation has been laid for the purpose of erecting the furnace is not in terms with the facts pleaded by the appellants. He has observed that similar furnace has made by M/s. A.B.B. Ltd. and M/s. Inductotherms (I) Ltd. This aspect of the matter has not been put to the appellants nor there is any evidence that the furnace has come into existence of goods in another factory and being erected in another factory. The facts disclosed that the item has come into existence along with civil work and the same cannot be dismantled and on such dismantling only spare parts are recoverable. The learned Commissioner relied on the judgment in the case of Name Tulaman Manufacturers Pvt. Ltd. and also in the case of Mittal Engineering Works Pvt. Ltd. reported in 1996 (88) E.L.T. 622 (S.C.). The Hon'ble Supreme Court has distinguished this judgment and observed in Para 8 that in that case the contention that weighbridges were not goods' within the meaning of the Act was not raised and no evidence in that behalf was brought on record. While discussing the aspect pertaining to Mono Vertical Crystallisers which has been assembled, erected and attached to the earth by a foundation at the site of the sugar factory. The Hon'ble Supreme Court held that it cannot be assumed that weighbridges stand on the same footing as Mono Vertical Crystallisers in that regard and hold that because weighbridges were held to be exigible to excise duty so must Mono Vertical Crystallisers. The Court has observed that the decision cannot be relied upon in support of a proposition that it did not decide. The Hon'ble Supreme Court after a detailed discussion held that the contention Mono Vertical Crystallisers are not goods within the meaning of the Act. The relevant portion of the judgment of Hon'ble Supreme Court in Paras 5 to 12 are noted herein below :-
"5. The principal question to which we must address ourselves is whether Mono Vertical Crystallisers are 'goods' upon which excise duty under the provisions of the Act can be levied.
6. In Union of India and Anr. v. Delhi Cloth and General Mills Co. Ltd., 1977 (1) E.L.T. (J 119) (S.C.) = AIR 1963 S.C. 791, a Constitutional Bench considered the application of the provisions of the Act to the hydrogenated oils that are known as 'vanaspati'. 'Goods' were not defined in the Act. The meaning, as found by the Court from dictionaries, showed "that to become 'goods' an article must be something which can ordinarily come to the market to be bought and sold". In Bhor Industries Ltd., Bombay v. Collector of Central Excise, Bombay, 1989 (40) E.L.T. 280 (S.C.) = 1989 (1) S.C.C. 602, the view taken in the case of Delhi Cloth and General Mills Co. Ltd. and reiterated in South Bihar Sugar Mills Ltd. etc. v. Union of India and Ors., 1978 (2) E.L.T. (J 336) (S.C.) = 1963 (3) S.C.R. 21, and Union Carbide India Ltd. v. Union of India, 1986 (24) E.L.T. 169 (S.C.) = 1986 (2) S.C.C. 547, was applied to crude PVC films. It was held that they "were not known in the market and could not be sold in the market and was not capable of being marketable". In Indian Cable Company Ltd., Calcutta v. Collector of Central Excise, Calcutta and Ors., 1994 (74) E.L.T. 22 (S.C.) = 1994 (6) S.C.C. 610, this Court considered the question of PVC compounds, and observed that marketability was a decisive test for durability. It meant that the goods were saleable or suitable for sale. They need not in fact be marketed. They should be capable "of being sold to consumers in the market, as it is without anything more". The case that comes closest to that which we have before us is the case of Quality Steel Tubes (P) Ltd. v. Collector of Central Excise, U.P., 1995 (75) E.L.T. 17 (S.C.) = 1995 (2) S.C.C. 372. The issue was whether "the tube mill and welding head erected and installed by the appellant for manufacture of tubes and pipes out of duty-paid raw material" was assessable to excise duty. The Court observed, having regard to the earlier decisions aforementioned, "The basic test, therefore, of levying duty under the Act is two-fold. One, that any article must be goods and second, that it should be marketable or capable of being brought to the market. Goods which are attached to the earth and thus become immovable and do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought to the market for being bought and sold." It was also said that the "erection and installation of a plant cannot be held to be excisable goods. If such wide meaning is assigned it would result in bringing in its ambit structures, erections and installations. That surely would not be in consonance with accepted meaning of excisable goods and its exigibility to duty."
7. Learned Counsel for Revenue relied upon the judgment in Narne Tulaman Manufacturers Pvt. Ltd., Hyderabad v. Collector of Central Excise, Hyderabad [1988 (38) E.L.T. 566 (S.C.) = 1988 Supp. (3) S.C.R. 1.] An indicating system was one of the three parts of a weighbridge, namely, (1) a platform, (2) load cells and (3) the indicating system. The Tribunal found that the appellant brought the three components together at site, fitted and assembled them so that they could work as one machine and, as such, the appellant manufactured a weighbridge. The question, therefore, was whether the activity carried out by the appellant, of assembling the three components of the weighbridge, brought into being a complete weighbridge, which had a distinct name, character or use. The argument of the appellant was that it was making only a part of the weighbridge, that is, the indicating system, and that alone was dutiable. It was held that the end product, namely, the weighbridge, was a separate product which came into being as a result of the endeavour and activity of the appellant, and the appellant must be held to have manufactured it. The appellant's case that it was liable only for a component part and not the end product was, therefore, rejected.
8. Learned Counsel for the Revenue submitted that if even a weighbridge was excisable, as held in the case of Name Tulaman Manufacturers Pvt. Ltd., so was a mono vertical crystalliser. The only argument on behalf of Name Tulaman Manufacturers Pvt. Ltd. was that it was liable to excise duty in respect of the indicating system that it manufactured and not the whole weighbridge. The contention that weighbridges were not 'goods' within the meaning of the Act was not raised and no evidence in that behalf was brought on record. We cannot assume that weighbridges stand on the same footing as mono vertical crystallisers in that regard and hold that because weighbridges were held to be exigible to excise duty so must mono vertical crystallisers- A decision cannot be relied upon in support of a proposition that it did not decide.
9. Upon the material placed upon record and referred to above, we are in no doubt that the mono vertical crystalliser has to be assembled, erected and attached to the earth by a foundation at the site of the sugar factory. It is not capable of being sold as it is, without anything more. As was staled by this Court in the case of Quality Steel Tubes (P) Ltd., the erection and installation of a plant is not excisable. To so hold would, impermissibly, bring into the net of excise duty all manner of plants and installations.
10. The Tribunal took an unreasonable view of the evidence. It was the case of the appellants, not disputed by the Revenue, that mono vertical crystallisers were delivered to the customers in a knocked down condition and had to be assembled and erected at the customers' factory. Such assembly and erection was done either by the appellants or by the customer. Where it was done by the appellants, fabrication materials of the customer were used and the customer sent to the appellants debit notes in regard to their value. Where the assembly and erection was done by the customer, there was no occasion for it to send to the appellants a debit note. The fact that there was no debit note in respect of one customer could not reasonably have led the Tribunal to conclude that in the case of that customer a complete mono vertical crystalliser had left the appellants factory and that, therefore, mono vertical crystallisers were marketable. The Tribunal ought to have remembered that the record showed that mono vertical crystallisers had, apart from assembly, to be erected and attached by foundations to the earth and, therefore, were not, in any event marketable as they were.
11. Having regard to the material on record, we come to the conclusion that mono vertical crystallisers are not 'goods' within the meaning of the Act and therefore, not exigible to excise duty.
12. The appeal is allowed. The judgment and order under appeal is set aside. There shall be no order as to costs."
The Hon'ble Supreme Court again in the case of Auto Measurematic Ltd. v. Assistant Collector of Central Excise, Madras reported in 1997 (96) E.L.T. 14 (S.C.), reiterated that the decision in the case of Name Tutaman Manufacturers was considered by the Court in the case of Mittal Engineering and it was explained that the only argument on behalf of Name Tulaman Manufacturers had been that it was liable to excise duty in respect of the indicating system that it manufactured and not the whole weighbridge. The Court observed that the contention weighbridges were not goods within the meaning of the statute were not raised, and no evidence in that regard was brought on record. The Court further observed that Name Tulanian Manufacturers judgment did not lay down that the weighbridges were excisable goods.
7. In the case of Quality Steel Tubes (P) Ltd. v. CCE, reported in 1995 (75) E.L.T. 17 (S.C.), the Hon'ble Supreme Court held that plant and machinery embedded to earth, structures, erections and installations are not excisable goods, since they do not pass the twin test of being capable of being brought to the market. The Supreme Court noted several judgments and observed that the basic test of levying duty under the Act was two fold. One, that any article must be goods and second, that it should be marketable or capable of being brought to the market. Goods which are attached to the earth and thus become immovable do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought to the market for being bought and sold. Therefore, the Hon'ble Supreme Court held that both the tests were not satisfied in the case of appellant as the tube mill or welding head having been erected and installed in the premises and embedded to earth they ceased to the goods within the meaning of Section 3 of the Act. Observing the contention of the learned Counsel for the Revenue that even if the goods were capable of being brought to the market it would attract levy, the Hon'ble Supreme Court observed that "True, but erection and installation of a plant cannot be held to be excisable goods. If such wide meaning is assigned, it would result in bringing in its ambit structures, erections and installations. That surely would not be in consonance with accepted meaning of excisable goods and its exigibility to duty."
8. Even in the case of Tata Robins Fraser Ltd., the Tribunal held that the completion of the project work as apparently being taken as an assembly of the machinery at site, the project itself being an immovable property cannot be chargeable to duty.
9. Taking into all the facts and circumstances and the manner in which the Electric Arc Furnace has come into existence, the only conclusion arrived at, is that, the judgments of the Hon'ble Supreme Court cited supra, apply to the facts of the present case and in that view of the matter, the impugned orders are required to be set aside and the appeals are to be allowed, which we order accordingly."
The above paragraphs are in keeping with the ratio of the Apex Court judgment rendered in the case of Triveni Engineering & Industries Ltd. It is to be noted that the judgment of Silical Metallurgical Ltd. has since been confirmed by the Apex Court. We also note that the Circular issued by the Board in this connection clearly laid down that once the boiler is removed, it becomes a scrap, and it has to be treated as immovable property. In the present case, we notice that the Board had issued a Circular in respect of Cethar Vessels itself which has already been noted by the Commissioner in the impugned order. The Commissioner has attempted to distinguish the Board's Circular issued in appellant's case on the ground that it is with reference to exemption Notification No. 205/88, We notice that the Circular is very specific to boiler cleared in CKD/SKD condition and we are of the considered opinion that the Board's circulars have got to be applied by the adjudicating authorities in the light of the Apex Court judgment rendered in the case of Ranadey Micronutrients v. CCE [1996 (87) E.L.T. 19].
9. As we have come to the conclusion that the boiler has been erected at the site which has become an immovable property and as the department has not discharged its burden that it is a marketable stage and continues to be goods, and the Board's Circular and the ratio of the judgments in the case of Triveni Engineering & Industries Ltd., (supra) Virdi Brothers v. CCE [2001 (132) E.L.T. 86] and Silica Metallurgical Ltd. (supra) is required to be applied to the facts of this case. Therefore, on this point alone, the appellants succeed and the appeals arc allowed by setting aside the impugned order.
We are not going into the question of time bar, value of the goods, duty to be paid, etc. as well as the consideration of Modvat credit in view of the fact that what has come into existence is an immovable property which is not dutiable. In that view of the matter, the impugned order is set aside and appeals are allowed.