Customs, Excise and Gold Tribunal - Mumbai
Asian Techs. Ltd. And Geo-Tech ... vs Commissioner Of Central Excise on 11 March, 2005
Equivalent citations: 2005(186)ELT183(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. The issue involved in both these appeals is common.
Appeal No. E/3047/98-Bom.
2. The appellants manufactures PSC girders at site to be used in the construction of a railway bridge for Konkan Railways during the period June 1994- Feb 1995 and cleared them without payment of Central Excise duty. By a show cause notice dt. 8.5.96 the appellants were asked to show cause why duty amounting to Rs. 53,91,498/- should not be demanded from them, why 14 PSC girders cleared without payment of duty should not be confiscated, and why penalty should not be imposed on the person concerned. The Commissioner adjudicated the case demanding duty, confiscating the girders which were by then removed to be placed on the bridge and imposing penalties. Hence these appeals.
3. Heard both sides.
4. The ld. Advocate argued that the show cause notice is barred by limitation in as much as it was issued beyond the statutory period of six months as it existed at the relevant time as the Department had knowledge of the fact that the appellants were manufacturing PSC girders in 94 itself. The show cause notice was issued only in 1996. It is pleaded that the manufacture of girders had taken place in the full view of the Public and therefore no suppression can be alleged (Gammon India v. CCE Goa was relied upon). It was also argued that the inordinate delay in issuing the notice vitiated the proceedings conducted in pursuance of such a notice. It was further urged that mere inaction on the part of the assessee in informing the Department cannot be a ground for invoking larger period of limitation unless it is established that such withholding of information was done with an intent to evade duty (CCE v. Chemphar Drugs and Liniments [1989 (40) ELT 276 SC relied upon). The appellants produced copies of their replies to the Department's queries during the years 94-96 in support of their contention that the department had knowledge of the fact that PSC girders were manufactured by the appellants. It was argued that in view of the factual position larger period of limitation cannot be invoked to demand duty.
5. The Ld. DR pointed out that in the present case the Department has come to know of the activity carried out by the appellants in April 1994 and immediately sought information from the appellants regarding the coating of girders process of manufacture etc. After receipt of information in May 1994 the Department directed the appellant to obtain a Central Excise Registration somewhere in Nov. 1994-1995 itself. However the appellants refused to take a registration as the they felt that they were not required to do so. Further correspondence was carried out to ascertain the correct details pertaining to the value of girders. The appellants refused to furnish information in time and therefore show cause notice could be issued only in 1996. Further refusal to take Central Excise registration amounts to contravening the provisions of Central Excise Rules and Act with an intent to evade payment of duty. Larger period therefore can be invoked in this case, he argued.
6. After hearing both sides on this aspect we are of the opinion that larger period of limitation is invocable in this case. The appellants contention that activity of casting PSC girders was going on in the full view of Central Excise officers is highly questionable. The Central Excise officers are not expected to be in know of the activities of the appellants in the jungles of Konkan. It is possible that general public is aware that Konkan Railway is laying a bridge connecting Mumbai with the State of Goa but one is not concerned with the bridge but with the PSC girders. No one can take a plea that if an activity is going on in the open suppression cannot be alleged against the person who is carrying on that activity. Further the appellants were asked to take out a Central Excise registration as early as 1994. The appellants kept arguing that they were not required to do so. In such an event larger period of limitation can be invoked as there is a deliberate contravention of Central Excise Rules with an intend to evade duty. The plea of the bona fide belief does not come to the rescue of an assessee when a proper officer instructs him to do something in accordance with law and the assessee refuse to follow the instructions. The period involved in this case is 94-95 and the show cause notice was issued in 1996. The plea that there is an inordinate delay in issuing the notice is not tenable. The appellants reliance on the decision in CCE v. Camphor Drugs [1989 (40) ELT 276 SC] does not help its case as in the appellants case we find that it is not a mere inaction on their part which is being relied upon by the Dept. to invoke larger period of limitation.
8. The appellants argued that the activity of making PSC girders for the purpose of laying a bridge does not amount to manufacture. This contention cannot be accepted in view of the fact that separate goods known as 'girders' come into existence after cement concrete and steel is subjected to certain processes. The fact that the girders are subsequently fixed on the bridge do not make them immovable property either. It is common knowledge that a bridge consists of various parts which are fixed on it permanently. That does not mean that the various parts of the bridge become immovable property and for that reason are not goods. Girders are cast at site, transported to the bridge head and then are launched on the bridge. It only shows that PSC girders falling under Chapter 6807 CETA have come into existence even before they are placed on the bridge and are therefore dutiable on that account. We are concerned with the assessment of girders and not the bridge itself. In the latter case one can argue that a bridge is not excisable because as it is immovable property and not the former.
8. The next issue pertains to marketability of PSC girders. It is argued that PSC girders are not marketable and therefore are not excisable. There are conflicting decisions on this issue. The Tribunal in the case of Delhi Tourism and Transportation Development Corporation v. CCE New Delhi [1999 (114) ELT 421 held that PSC girders are excisable falling under Chapter heading 6807 of CETA but are exempt from duty as under Notification No. 59/90-CE dtp 20.3.90 as they are manufactured at site. But a coordinate Bench of the Tribunal in the case of Billimoria & Co.Pvt.Ltd. Order No. C-II/890,891/WZB/2003 dt. 25.9.2003 held them to be not marketable. None of these decision have been upset by a higher judicial forum. In view of these conflicting decisions the matter need to be referred to a larger Bench for a decision on this issue.
9. One other contention of the appellant is that the benefit of Notification No. 59/90 is applicable to them as the goods are manufactured at site and fall under chapter heading 68.07 of CETA. The Commissioner however contends that Notification No. 59/90 as it stood at the relevant time does not cover goods falling under Chapter 6807 which are manufactured at site and to be used in construction of bridges. The notification covers only those goods which can be used in construction of buildings. According to him only Notification No. 51/95-CE dt. 16.3.95 exempts goods, falling under Chapter heading 6807, manufactured at site to be used in the construction work. The scope of this notification is wide enough to cover goods used in the bridges whereas the earlier one is not. He rejected the appellants contention that the later notification is only clarificatory and therefore has retrospective application.
10. We have perused both the notifications. The appellants contention that Notification No. 51/95 is clarificatory in nature cannot be accepted. The said notification enlarges the scope of earlier notification No. 59/90 as amended by notification 36/94 so as to cover goods falling under Chapter 68.07 which are used in any construction and not only in buildings. We are also of the opinion a building as it is normally understood does not cover a bridge, dam etc. The disputed period in the present case is June 1994 - February 1995, a period covered under Notification No. 59/90.
11. The appellants are therefore not entitled to the benefit of exemption. We notice that the issue whether Notification No. 59/90 covers goods meant for construction of bridges has not been specifically examined by the Tribunal which only decided the issue pertaining to the meaning and purport of the word 'Site'.
12. We have perused the various decision of the Tribunal on the eligibility of PSC girders/other goods falling under chapter heading 6807 when manufactured at site when Notification No. 59/90 CE was in force. None of these decisions dealt with the issue of whether or not Notification No. 59/90 applies to goods manufactured at site for constructions of structures other than buildings.
(a) Pratibha industries v. CCE, Bombay.
Final Order No. 380-381/97 dt. 8.5.1997 The issue decided pertains to the question as to what constitutes a site.
(b) Delhi Tourism & Transportation Devep. Corporation v. CCE New Delhi [1999 (114) ELT 421 (Tribunal)] Held that PSC girders are liable to duty under Chapter 6807 but since they are manufactured at site are exempt from payment of duty under Notification No. 59/90. The Tribunal does not specifically answers the question whether the said notification applies to goods manufactured at site but are used in the construction of structures other than buildings. This specific issue is raised in the present appeal by the Commissioner.
(c) B.E. Billimoria & Co. Pvt. Ltd. Vs. CCE, Pune Order No. C-II/890-891/03-WZB dt.25.4.03 Held that PSC girders are not marketable and therefore Are not excisable, a view contrary to the one expressed in Delhi Tourisum's case. It was specifically pleaded before the Bench that Notification No. 59/90 does not apply to PSC girders built at site and used in the construction of a bridge. The Tribunal did not meet with the argument of the Revenue.
(d) U .P. State (SIC) Corporation Ltd. v. CCE Chandigarh-II [2001 (230) ELT 290 (Tri.Del.) The issue pertains to application of Notification No. 51/95CE dt. 16.3.95 for goods manufactured far away from the site of construction. Notification No. 51/95 amends Notification No. 59/90
(e) K.S. Swamy & Company v. CCE, Madurai [2001(130) ELT 894 (Tri.Chennai)] The decision does not specifically deal with the applicability of Notification No. 59/91 to goods manufactured at site but used in structures other than buildings. Relies on Delhi Tourisum & Transportation Development Corpn.
(f) Tecco v. CCE, Madurai [2001 (47) RLT 831 (CEGAT-Che.)] Follows decisions in K.S. Swamy & Co and decides the issue.
The we observe that in none of these decisions the exact purport of the word 'building' used in Notification No. 59/90 was discussed. In view of the exemption carried out in the year 1995 and issuance of Notification No. 51/95, substituting the words 'site of building' with 'site of construction' the word 'building' has to be interpreted properly. That a Notification has to be strictly constructed etc. is well established.
13. Yet another contention raised by the appellant is in respect of valuation of the goods. The Commissioner arrived at the value adopting the costing method. He took into consideration the total cost of the product, labour charges and profit to arrive at the assessable value. This data was furnished to the Department by the appellants themselves. In the appeal memorandum at para 27 the appellants made reference to certain deductions that ought to have been given. They have, however not furnished any details. In fact the appellants were attempting to argue that in a work contract it is difficult to assign values to individual items of work. While it may be so, the appellants plea that because it is difficult to assign value to individual items no duty becomes chargeable on goods which are produced while executing a contract is not acceptable. We therefore uphold the valuation.
14. The Commissioner held the girders liable to confiscation as they were cleared without payment of duty. The fact that they have become a part of the bridge after they have been fixed should not make any difference to their confiscability according to him.(SIC) The order of confiscation. The Commissioner imposed a redemption fine of Rs. 5 lakhs. We do not know what would happen if the appellants do not redeem them. The Commissioner would be in no position to pull down the bridge to recover the blessed girders. Penalty imposed under Section 11AC and interest demanded under Section 11AB are set aside considering the fact that the period involved is prior to September 1996.
Appeal No. E/3048/98-Bom.
15. The facts are identical except the demand for duty is different. The period invoked is June 1994-February 1995. For the reasons given in our order in appeal No. E/3047/98 we come to the same conclusion.
16. But since there are conflicting decisions on the excisability of PSC girders the matter needs to be referred to a larger Bench. Since applicability of Notification NO. 59/90 to goods manufactured at site which were not used in the construction of buildings was not specifically dealt with in various decisions as mentioned by us. A Larger Bench has to be constituted to go into this aspect.
17. In view of the conflicting decisions on the issue the President/HOD is requested to constitute a Larger Bench to decide the issue framed as under:
18. Whether PSC girders manufactured at site for the construction of a bridge are marketable goods attracting Central Excise duty under tariff heading 68.07 of CETA 1985 and if so whether they are exempt under Notification 59/90 CE dt.20.3.90 when the notification speaks of building and not bridges in the light of the amendment carried out by Notification No. 51/95.