Cce, Delhi-Iii vs M/S.Chawla Techno Construct Ltd

(Arising out of OIA No.16-17/GRM/GGN/2006 dt. 16.1.06 passed by Commissioner of Central Excise (Appeals) Delhi-III)

CCE, Delhi-III Appellants

Vs.

M/s.Chawla Techno Construct Ltd. Respondent

Appearance:

Present for the Appellant: Shri Y.P.Sharma, AR

Present for the Respondent: Shri R.S.Tandon, Advocate

Honble Mr.P.K.Das, Member (Judicial)

Honble Mr.P.S.Pruthi, Member (Technical)

1.

Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No

3. Whether their Lordships wish to see the fair copy of the order?

seen

4. Whether order is to be circulated to the Department Authorities?

Yes

Coram: Honble Mr. P.K.Das, Member (Judicial)

Honble Mr.P.S.Pruthi, Member(Technical)

Date of Hearing/decision: 19.01.2015

FINAL ORDER NO.50655-50656/2015

PER: P.S.PRUTHI

Two appeals are at hand, although the Order-in- Appeal in respect of the two appeals is the same. One appeal was filed by the Commissioner inadvertently. Later same appeal was filed by the Committee of Commissioners as per law.

2. The appeal has been filed against the Order-in-Appeal of the Commissioner (Appeals) who held that the respondent are not liable to pay duty on the goods manufactured by them.

3. The facts of the case are that the respondent allegedly provided aluminum doors and windows as a part of a contract, to M/s.DLF Universal Ltd., for their building site at Gurgaon. It was alleged that the respondent procured aluminum sections from various suppliers, sent them for powder coating on job work basis, then handed over the same to another person for fabrication and installation of doors and windows at site and glasses were subsequently fixed to the doors and windows by another person. According to the Revenue, the activities amounted to manufacture of doors and windows and duty was payable by the respondent. The Commissioner (Appeals) noted that the appellant were purchasing aluminum sections which were fixed to the building so as to become immovable property. He referred to the Honble Supreme Court judgement in the case of Sirpur Paper Mills vs. CCE-1998 (97) ELT 3 (SC) which ruled that if the resultant product, fixed to the earth, can be dismantled without causing substantial damage to the product, the product would qualify to be goods and attract excisabililty. According to him, doors and windows in the present case could not be removed without causing substantial damage to the glasses and therefore after fitment of glasses, they had ceased to be goods. Revenue has appealed against the order of the Commissioner (Appeals) on the ground that the aluminum doors and windows came into existence and twin test of mobility and marketability is satisfied for consideration of being goods so as to attract Central Excise duty.

4. Heard both sides.

5. Learned AR relied on the decision of the Tribunal in the case of Alumayer India Pvt.Ltd. vs. CCE & C., Hyderabad-IV-2012 (278) ELT 123 (Tri.-Bang) in which the Tribunal has held that aluminum sections forming structurals fabricated prior to erection of windows and structural glazing amounts to manufacture under section 2(f) of Central Excise Act, 1944.

6. On the other hand, learned Counsel for the respondent relied on the decision of the Tribunal in the case of Mahavir Aluminum Ltd. Vs. CCE, New Delhi-III-2003 (153) ELT 65 (Tri.-Del.) and in the case of Lokhandwala Hotels Pvt.Ltd. vs. CCE-2005 (182) ELT 188 (Tri.-Mum.) in support of his stand that doors and windows come into existence after they have been fixed to the structurals.

7. We have considered the rival contentions. At the outset, we find that the ground of appeal is vague on the main issues at hand. The appeal stresses more on who has manufactured the goods i.e. aluminum doors and windows and the fact that the goods were supplied to DLF by the respondent by raising final bills. The grounds of appeal have not taken into account or considered various judgements on the issue of excisabillity in respect of similar items - aluminum doors and windows. We also note that the duty has been demanded on doors and windows and not on aluminum structural frames. Therefore we find that the case of Alumayer India Pvt.Ltd. is not directly applicable to the facts of the present case. On the other hand, judgement in the case of Mahavir Aluminum Ltd. and Lokhandwala Hotels Pvt.Ltd. would apply in the present case. It was held in the case of Lokhandwala Hotels Pvt.Ltd. as under:

?4.Having said that, we examine the plea of the appellants that the process carried out by them did not amount to manufacture of windows. To appreciate this plea one has to understand the process of manufacture involved in the present case. The original authority dealt with this at some length. According to him the contractor engaged by the appellant, first cuts the aluminum profiles into required sizes and then joins them with the help of screws. Thus he first makes a frame. He then takes the frames to the floor of the hotel where they have to be fixed and installs them manually. After the installation of frames aluminum shutters, which are also assembled/fabricated, were taken to the floor where the frames are fixed/installed. They (shutters) were fastened with the screws to the frame. After this is done glass pcs. of required size were fixed into the frames. Thereafter aluminum clips were fitted to the frames to hold the glass in position. One could see that a complete window comes into being only after the frames are embedded into the structure. Thus while the parts of windows have come into existence at site, the windows themselves have been brought into being only after the frame is permanently fixed. What is permanently fixed is not goods as it becomes immovable and immovable goods are not excisable. Had the impugned order demanded duty on the parts of windows it could be sustained? However the impugned order demands duty on the full windows, which have come into existence after they have become immovable goods. The impugned order proceeds on a wrong footing that the appellant was manufacturing windows and not parts of windows. It is for this reason only the department seeks to add the value of the glass that is fitted into the windows. We observe that windows are excisable if they come into existence even before they are fitted to the walls. But in a case where various parts of windows are permanently fixed to a structure it is not possible to make them exigible as windows. The plea of the appellant that the windows as manufactured by them are not excisable has to be accepted.

8. In view of above, we come to the conclusion that aluminum doors and windows are not goods. In the manner in which they have been fixed to the civil structural at the site they get embbed to the structure and cannot be removed without damage to the glasses. The process does not amount to manufacture and does not satisfy the test of marketability and movability. Therefore, we hold that the duty demand is not sustainable on this ground.

9. The appeals are rejected.

(Pronounced in the court)

(P.S.PRUTHI) (P.K.DAS)

MEMBER (TECHNICAL) MEMBER(JUDICIAL)

mk

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