Commissioner Of Central Excise vs M/S. National Steel Industries Ltd

[Arising out of Order-in-Appeal No IND-I/183/2006 dated 9.5.2006 passed by the Commissioner of Customs & Central Excise (Appeals II), Indore]

For approval and signature:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

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

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

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Commissioner of Central Excise Appellants

Indore

Vs.

M/s. National Steel Industries Ltd. Respondent

Appearance:

Shri Govind Dixit, DR for the Appellants

Shri Rahul Tangri, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Mr. B Ravichandran, Member (Technical)

Date of Hearing /decision: 24.09.2015

FINAL ORDER NO. 53075 /2015-EX(DB)

Per B Ravichandran:

The Revenue is in appeal in this case against the order dated 9.5.2006 of the learned Commissioner (Appeals). The respondents are engaged in the manufacture of steel structures and parts thereof. Proceedings were initiated against the respondent to demand Central Excise duty in respect of iron and steel structures like trusses, columns, staircase, windows and section etc. The case was decided by the original authority who confirmed the demand and imposed equal amount of penalty. On appeal, the learned Commissioner (Appeals) set aside the order and allowed the appeal. Aggrieved by the said order, Revenue is in appeal before us.

2. In the grounds of appeal, Revenue contended that the respondents were engaged in the manufacture of steel structures and parts thereof falling under CETH 7308.90 using the labour contractors. These steel structures are commonly known as component parts of building/ shed. The finished product is made from duty paid raw material and is totally different in looks, functions and utility. This activity amounts to manufacture as per section 2(f) of the Central Excise Act, 1944, The Revenue contended that consequent to remand order of the Honble Supreme Court in the case of CCE, Jaipur vs. Man Structures Ltd. [2001 (130) ELT 401 (SC)], the Larger Bench of this Tribunal [2005-TIOL -1215-CESTAT-DLH-LB] held that these structures and the like articles are liable to excise duty under heading 73.08. The Revenue also relied on Tribunals decision in M/s. Asian Tech Ltd. [2005 (189) ELT 420 (Tri-LB)] and M/s. Sangmeshwar Pipe and steel Traders [2002 (141) ELT 252]. It was prayed to set aside the order-in -appeal which is not legal and proper.

3. During the arguments, the learned AR stated that learned Commissioner (Appeals) order is not correct in view of Larger Bench decision (supra) of this Tribunal which was rendered on a remand by the Honble Supreme Court.

4. Learned Counsel for the respondent stated that the learned Commissioner (Appeals) examined all the relevant case laws before arriving at a decision. He further stated that period of dispute in the current case is prior to 1.4.1987 and at that time there was no specific heading like 73.08 which was introduced only from 1.3.88. He relied on decision of the Honble High Court of Madhya Pradesh in the case of Bajaj Tempo Ltd. vs. UOI [1997 (95) ELT 212 (MP)]. He also submitted a compilation of case laws in support of the decision of learned Commissioner (Appeals). He drew our attention to the decision of this Tribunal in the case of Elecon Engineering Co. Ltd. [2005 (190) ELT 195 (Tri-Del)] which was upheld by the Honble Supreme Court [2012 (277) ELT A 84 (SC]). He also contended that actual activity was carried out by the contractor at site. Even if excise duty is to be recovered, considering the activity as manufacture, the contractors who were doing the said work at site are only liable. In this regard, he relied on this Tribunal decision in Diamond Cements Ltd. [2012 (283) ELT 226 (Tri-Del)]. He said the facts of their case is similar to the one decided by the Tribunal.

5. We have heard both the sides and examined the appeal records. First, we consider the question of excise duty liability on the nature of activity now under dispute. We find that there is a change in the scope of tariff entries in respect of the impugned goods pre and post 1.3.1988. The CETH 73.08 effective from 1.3.88 clearly covers structures and parts of structures like bridges, towers, roofs, doors and windows of iron and steel, plates, rods, angles, sheds, sections etc. prepared for use in structure of iron and steel. Thus, the clear and specific classification of the impugned items were available with effect from 1.3.1988. Prior to that date, the classification was sought to be made under 7308 90 : as Misc other articles of iron and steels. The Revenue seeks to rely on the Larger Bench decision of this Tribunal in Mahindra and Mahindra Ltd. [2005 (190) ELT 301 (Tri-LB]). The decision deals with period post 1.3.88. We find that similar issue came into consideration before this Tribunal in Elecon Engineering Co. Ltd. (supra) relying on decision in the case of Aruna Industries [1986 (25) ELT 580] and in Wainganga Sahkari S Karkhana Ltd. [2002 (50) RLT 177)], later confirmed by the Honble Supreme Court in 2002 (142) ELT 12(SC)] and Honble Bombay High Court decision in Sunflag Iron and Steel Co. Ltd. [2003 (162) ELT 105 (Bom)], held that these goods are not excisable. The Revenue filed appeal against the decision of this Tribunal in Elecon Engineering. Co. Ltd. (supra) and the Honble Supreme Court dismissed the appeal with following observations: -

It is manifest from the impugned judgment that while holding that the fabrication of columns, purlines, etc. by cutting, drilling, punching and welding on duty paid channels and angles, for being assembled to the post at work site does not amount to manufacture, the Tribunal has relied on its earlier decision in the case of Aruna Industries, Vishakhapatnam v. C.C.E., Guntur [1986 (25) E.L.T. 580].

The decision of the Tribunal in Aruna Industries (supra) has since been affirmed by a bench of three learned judges in Commissioner, C. Ex., Nagpur v. Wainganga Sahkari S. Karkhana Ltd. [2002 (142) E.L.T. 12 (S.C.)].

In that view of the matter, the issue sought to be raised by the Revenue in these appeals is no longer res integra. Accordingly, following the decision in Wainganga Sahkari S. Karkhana Ltd. (supra), the appeals are dismissed. No costs.

6. Considering the above discussions and following the decision of Honble Supreme Court, we find that the learned Commissioner (Appeals) is correct in his decision and as such, there is no reason to interfere with the impugned order. Accordingly, we dismiss the appeal filed by the Revenue.

( operative part of the order pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

( B Ravichandran )

Member(Technical)

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