Custom, Excise & Service Tax Tribunal
M/S.Lord Chloro Alkali Ltd vs Cce, Jaipur on 24 July, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/Decision:24.07.2014
Appeal No.E/96/2006/EX-DB
[Arising out of Order-in-Original No.19/2005 dated 27.09.2005 passed by the Commissioner of Central Excise, Jaipur-I).]
M/s.Lord Chloro Alkali Ltd. Appellant
Vs.
CCE, Jaipur Respondent
For approval and signature:
Honble Smt. Archana Wadhwa, Member (Judicial)
Honble Shri Rakesh Kumar, Member (Technical)
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1. Whether Press Reporters may be allowed to see No
CESTAT (Procedure) Rules, 1982.
2. Whether it should be released under Rule 27 of the No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Appearance: Rep. by Shri K.K. Anand, Advocate for the appellant.
Rep. by Shri M.S. Negi, DR for the respondent.
CORAM: Honble Smt. Archana Wadhwa, Member (Judicial)
Honble Shri Rakesh Kumar, Member (Technical)
Final Order No. 53075/Dated:24.07.2014.
Per Archana Wadhwa:
The appellant is primarily and basically engaged in the manufacture of various types of chemicals. In the years 1991 and 1992, he fabricated 26 MW power generating sets but same were installed and commissioned in October, 1991 and February, 1992 under intimation to the Revenue.
2. The appellant were issued a show cause notice on 23.11.1993 alleging that they have manufactured two diesel generating sets and are required to pay duty on the same. Accordingly, notice proposed confirmation of demand of duty to the tune of Rs.76 Lakhs approximately along with imposition of penalty. The notice culminated into an order passed by the Commissioner confirming the demand and imposing penalty of Rs.15 Lakhs. Hence, the present appeal.
3. After hearing both the sides and after going through the impugned orders, we find that D.G. sets fabricated by the appellants weigh approximately 65 tonnes each and are capable of generation of 6 MW of power. The appellants have procured various parts of the D.G. Sets from other manufacturers on payment of whatever duty is required to be paid on the same. The various parts of the D.G. Sets so purchased by them are placed on the foundation, joined with each other and altered and grated with bolts. The entire D.G. sets, which comprised of a separate building, were erected and commissioned under the supervision of Tata Consultancy Engineers. The D.G. sets and alternators are placed on different foundations and rubber plants, which rubber plants were provided and alignment was done for diesel engine and alternator. After alignment, foundation bolts passing through base frames of Diesel Engine and alternators were tightened with the help of nuts.
4. The appellant, during the course of adjudication, took a plea before the Commissioner that inasmuch as the huge D.G. Sets, so erected by them, are attached to earth and are incapable of being brought and sold and as such, the same cannot be held to be excisable goods. The demand was also assailed on the point of limitation. However, the said pleas of the appellant were not accepted by the adjudicating authority, who confirmed the demands and imposed penalties.
5. Ld. Advocate has brought to our notice the Tribunals decision in the case of Western India Machinery Co. Vs. Commissioner 2001 (141) ELT 574 (Tribunal-Kolkata), wherein dealing with an identical case of installation of Diesel Generating Sets, the Tribunal observed that inasmuch as the same was attached to concrete platform, the same cannot be held to be marketable and excisable. The Tribunal for arriving at the above finding relied upon the Supreme Courts decision in the case of Triveni Engg. & Industries Ltd. Vs. Commissioner of Central Excise 2000 (120) ELT 273 (SC). The said decision of the Tribunal was appealed against by the Revenue before the Supreme Court and their appeal was dismissed as reported in 2001 (141) ELT A-187 (SC).
6. On the other hand, the ld. DR has relied upon the Honble Supreme Courts decision in the case of Sirpur Paper Mills Ltd. Vs. CCE, Hyderabad 1998 (97) ELT 3 (SC) to support his contention that mere fixing of the machines for wobble free functioning will not turn the same as being attached to earth so as to be treated as immovable goods. He also relied upon the Tribunals decision in the case of Cheran Spinners Ltd. Vs. CCE, Coimbatore 2008 (231) ElT 315 (T-Chennai). Ld. DR has also referred to the majority decision in the case of Vineet Electrical Industries Pvt. Ltd. Vs. CCE, BBSR-II 2001 (136) ELT 784 (Tribunal-Kolkata).
7. We have gone through all the above referred and relied upon decisions . We are of the view that the facts in the present case are identical to the facts in the case of Western India Machinery Company (supra), which stands upheld by the Honble Supreme Court. As regards the DRs reliance on the decision in the case of Sirpur Paper Mills Ltd. (supra), we find that the same was considered by the Honble Supreme Court in the case of Triveni Engg. & Industries Ltd. (supra) and Triveni Engg. & Industries Ltd. stands considered by the Tribunal in the case of Western India Machinery Company. Further, the decision of the Tribunal in the case of Cheran Spinners Ltd. (supra) referred to Sirpur Paper Mills Ltd. (supra) and the Tribunals decision in the case of Triveni Enggg. Works Ltd. As we have already observed that Sirpur Paper Mills Ltd. (supra) was considered by the Supreme Court subsequently in the case of Triveni Engg. Works and a different view was taken. The Tribunals decision in the case of Triveni Engg. Works (supra) relied upon in the case of Cheran Spinners Ltd. (supra) was subsequently reversed by the Honble Supreme Court and as such, no reliance can be placed upon the same. As regards Vineet Electrical Industries Pvt. Ltd. (supra), we find that both the members held against the assessee on merits and there was difference only on the point of limitation. The said difference of opinion on limitation issue was referred to the then President as third Member. The President of the Tribunal, vide his order passed on the difference of opinion, took note of the subsequent development in the case of Triveni Engg. (supra) and held that even the issue stands decided on merits by the Supreme Courts decision in the case of Triveni Engg. (supra). As such, the merits were also held in favour of the assessee.
8. As such, it can be rightly concluded that the issue on merits is decided in favour of the assessee by various decisions as discussed above.
9. We have also seen the photographs produced before us which establish that D.G. Sets are huge and are installed in a separate building, spread over large area. The same are not portable D.G. sets which can come to market for being bought and sold.
10. Though we have held in favour of the assessee on merits, but duty of demand is also barred by limitation. As per the statement of Authorised Representative dated 19.10.2002, the jurisdictional Central Excise Authorities were informed about the intended fabrication of the D.G. Sets at the premises in the year 1989 itself. Even the Tribunals decision in the case of Triveni Engg. (supra), which held against the assessee on merits, the benefit of limitation was given by observing that there cannot be any reason for suppression inasmuch as in terms of the Boards Circular dated 6.11.86, which was withdrawn subsequently on 11.10.90, no duty was to be discharged on the combination of engine and alternators assembled. As such, we find no suppression can be attributed to the assessee so as to uphold the longer period of limitation. We have also seen the photographs produced before us which establish that D.G. Sets are used as D.G. sets spread over in a separate building.
11. In view of the above, we set aside the impugned order and allow the appeal on merits as also on limitation with consequential relief to the appellant.
(Archana Wadhwa) Member (Judicial) ( Rakesh Kumar ) Member (Technical) Ckp.
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