Aftab Alam, J.
1. The Tata Iron & Steel Company Limited (hereinafter referred to as 'the petitioner') and the Revenue are in dispute over the question whether certain structural materials and fixtures such as Columns, Braces, Trusses, Purlins, Ducts, Chutes, Hoppers, Bins, Walkways, Stair cases, hand railings and platforms etc. which were forged from duty paid iron/steel plates, angles, channels, girders etc. supplied by the petitioner and which finally went into the erection and installation of Sinter Plant No. 2 in the petitioner's works were eligible to excise duty. This disputes has been brought to this Court by filing this writ petition against the order, dated 22-11-1990 passed by the Collector, Central Excise, Patna. By the impugned order, he confirmed the demand for Rs. 3,55,81,610.71 paise against the petitioners and imposed a penalty of Rs. 10 lacs, further directing that interest @ 18.5% would accrue on the amount of excise duty and penalty if that amount remained unpaid after one month from the date of receipt of the order.
2. The order passed by the Collector was appealable under Section 35B of the Central Excise Act but the petitioner chose to come directly to this Court trying to take advantage of the fact that the matter had earlier come to this Court (at the petitioner's instance) when it was still at the stage of notice and enquiry. At that stage this Court declined to interfere in the matter holding that the questions raised by the petitioner required further enquiry and disposed of the writ petition directing the Collector to give all opportunities to the petitioner to bring on record materials, including expert opinion, in support of the case that no excisable goods came into being at any stage in the setting up of Sinter Plant No. 2. Later, when the impugned order was passed, the petitioner filed this writ petition directly before this Court taking the plea that the Collector had passed the order in violation of the directions given by this Court. This writ petition was admitted on January 24, 1991 and from the admission order, it appears that the Bench intended to hear and finally dispose of this matter within less than three months. That, however, was not to be and this case came up for hearing after more than 7 /2 years. Though we were unable to approve of the petitioner coming to this Court directly, we felt after such a long time it would not be fair either to the petitioner or the Revenue to ask the matter to be taken to the appellate authority and in that view we proceeded to hear this case on merits.
3. According to the petitioner's case, as a part of its expansion programme it was required to set up Sinter Plant No. 2 in its works. The plant was to be set up according to the specified designs suited to the petitioner's requirements. A precise description of the Sinter Plant is not given either in the writ petition or the impugned order or the counter affidavit filed on behalf of the respondents but from the submissions made at the bar we are able to gather that Sinter Plant is a covered area where certain industrial operations -are carried on. The covered area is set up by means of structural materials such as columns, beams, joists, supports, trusses, purlins, etc. Further, in order to facilitate the industrial operation and the movement of men arid materials, it is provided with fixtures and devices like hoppers, bins, conveyers, ducts, chutes, walkways, stair cases, hand railings, platforms etc. It is undeniable that Sinter Plant itself is an immovable structure being firmly fixed to the ground and the structural materials and devices and fixtures that go into its making also become parts of an immovable structure.
4. According to the petitioner, it had given the work of fabrication, erection and installation of the Sinter Plant to a number of independent firms and companies some of which are (i) Tata Robins & Frazer Limited, Jameshedpur, (ii) Pioneer Engineering Company, Jamshedpur, (iii) Larson & Toubro Limited Engineering Construction Corporation, Bombay, (iv) Bal Krishna & Company, Jamshedpur, (v) Shaporejee Palonjee, Bombay and others. According to the petitioner's case, its contract with those firms were on principal to principal basis and were entered into at arms length. It is further the case of the petitioner that for setting up the Sinter Plant it supplied to its contractors on site, duty paid materials, such as iron and steel plates, angles, channels, girders etc. from which the contractors forged the different structural materials, fixtures and devices assigned to them under their respective contracts as per the specified designs, to be used in the setting up of the plant.
5. While the work was in progress, the Superintendent, Central Excise in course of his visit to the petitioner's works noticed the aforementioned structural materials, fixtures and devices and thought that those goods could be subjected to excise duty under sub-heading 7308.90 (residuary head for structures of Iron and Steel) of the Central Tariff Act, 1965. He accordingly wrote a letter to the petitioner company on 16-1-1988. By the said letter, the Superintendent directed the Company and its three contractors, namely, M/s. Tata Robins & Frazer, M/s. Bal Krishna and Company and M/s. Shaporejee Palonjee Pvt. Limited not to remove those 'manufactured goods' until further orders. He also restrained the petitioner company from supplying further materials to its contractors for fabrication of more such goods and prohibited the contractors from carrying any of those articles/goods from their side yard to the erection site of the Sinter Plant.
6. This led to a few skirmishes between the petitioner company and its contractors on the one side and the revenue authorities on the other. The revenue authorities applied coercive measures in an effort to make the petitioner company and its contractors accept the Revenue's point of view on two such occasions the petitioner company and its contractors approached the Collector (Appeals) and managed to get some respite. However the enquiry into the question of law of excise duty on the goods in questions went on and on 18-7-1988 the petitioner received a notice from the Deputy Collector, Central Excise asking it to show cause why excise duty should not be recovered on the goods in question. According to the Deputy Collector the company and its contractors were manufacturers of excisable goods on which excise duty was leviable. At that stage, the petitioner (in CWJC No. 1278/1988-R) and one of its contractors M/s. Tata Robins & Frazer Limited (in CWJC No. 1571/1988-R) came to this Court challenging that notice and seeking, inter alia, a declaration that no excise duty was payable on the articles/goods fabricated by the contractors from the duty paid materials supplied by the petitioner for setting up its Sinter Plant. Those two writ petitions were disposed of by a Bench of this Y Court by a common judgment and order dated 27-1-1988. In that judgment this Court observed that it found it difficult to form any definite opinion whether the fabricated articles were 'goods' within the meaning of the Act. However, at that stage, it declined to grant the relief sought by the petitioner and disposed of those two writ petitions with a direction to the Collector to give all opportunities to the petitioner to bring on record materials, including expert opinion in support of its case. The relevant extract from that judgment is as follows :-
'For the reasons aforesaid, we are of the opinion that at this stage this Court is not in a position to hold conclusively whether activities of the contractors in adopting the duty paid places, channels, angles etc. for setting up Sinter Plant No. 2 will amount to manufacture of goods within the meaning of the Act. The question requires further enquiry and no relief can be granted to the petitioners at that stage with regard to the principal prayer No. (1) made by them as noticed hereinabove.
Respondent No. 2 shall give all opportunities to the petitioners to bring on record materials including expert opinion in support of their cases. In view of the fact that the tariff advise as contained in Annexure-12 which was followed by trade notice as contained in Annexure-11 were without jurisdiction, we quash the same. The assessing officer on the basis of the materials on record must give reasons in the event he holds that the activities of the contractors amount to manufacture of goods within the meaning of the Act so that the order can be tested in a Court of law. We have refrained from giving any finding on merit with regard to the other questions involved and raised in these cases.'
7. Following the aforesaid judgment of this Court the petitioner company on 16-6-1989 filed its reply to the show cause notice dated 18-7-1988 issued by the Deputy Collector and tried to substantiate its reply by filing what was described as the expert opinion of its General Manager (Engineering) on 27-6-1989.
8. The Collector, Central Excise then issued another show cause notice dated 4-12-1989 in which a description was given of the specific items being 'manufactured' by the different contractors in the following manner :
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SI. No. Name of Firms/Companies Name of the goods manufactured
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1. M/s. Tata Robins Frazer Ltd. Ducts, Chutes, Hoppers, Wind
Boxes, Bins, Bunkers, Portal,
Girder, Bracing etc.
2. M/s. Bal Krishna Company Columns, girts, trestle, gallery for
conveyor etc.
3. M/s. Larsen & Toubro Ltd. E.C.C. Columns, beams, trestles, bottom
Construction Group. hopper & gallery for conveyors.
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9. The duty of excise, which according to the revenue was payable on those items was then worked out in detail and the petitioner was asked to show cause why it should not be held liable to make the payment. The petitioner filed its reply to the show cause notice issued by the Collector on 30-1-1990/2-2-1990 denying the entire liability. Finally the Collector after hearing the representative of the company passed the impugned order confirming the demand for excise duty and imposing a penalty as stated above.
10. We were informed that proceedings for levying excise duty on the same materials was simultaneously initiated against the different contractors engaged by the petitioner for setting up its Sinter Plant No. 2 and though the proceeding against the petitioner company was concluded by the impugned order, the proceedings initiated against the contractors have been kept pending and remain undisposed of till now.
11. Long and elaborate submissions were made before us for assailing the impugned order passed by the Collector, Central Excise, and in its support.
12. Mr. A.B.S. Sinha, learned Counsel for the petitioner submitted that an article in order to qualify as excisable goods must satisfy the twin attributes of being movable and marketable. With reference to several decisions of the Supreme Court, learned Counsel submitted that the principle was now well settled that to be called goods articles must be such as capable of being bought and sold in the market. Turning then to the facts of this case it was stated that the structural materials, fixtures and devices fabricated by the petitioners contractors were specially designed as integral components of the company's Sinter Plant No. 2 and not a single article out of those mentioned in the Collector's show cause notice could, therefore, be taken to the market for being bought and sold. The structural steel work which was fabricated for setting up the plant was commercially as unknown commodity and no excise duty could, therefore, be levied .on those articles.
13. Mr. Sinha next submitted that no manufacturing process was involved in forging the articles sought to be subjected to excise and the fabrication activity undertaken by the contractors amounted to no more than modifying, sizing, shaping and fitting duty paid iron and steel materials supplied by the petitioner company for erection/setting up of the Sinter Plant. At no stage in the installation of the Plant the duty paid materials supplied by the petitioner such as plates, bars, angles, channels etc. underwent any manufacturing activity within the meaning of Section 2(f) of the Central Excise Act.
14. These were in brief the petitioner's submissions on the issue of the articles in question being eligible to excise duty.
15. Apart from resisting the demand of the Revenue on merits, it was submitted that the demand had become barred by time in terms of Section 11A and it was, therefore, no longer open to the Revenue to raise the impugned demand.
16. It was further submitted that even if it were to be held that the articles in question were eligible to the levy of excise and the demand was, for some reason, not barred by limitation there was no way the demand could be made against the petitioner. In this connection it was stated that the different contractors of the petitioner were independent entities and it could not be said that those contractors were acting for and on behalf of the petitioner simply because the materials necessary for fabrication of the steel structure were supplied to them by the petitioner in accordance with the terms of the contracts. Hence, in case any manufacturing process took place as a result of which some excisable goods came into being, the manufacturers of those goods were the different contractors who alone must, therefore, be held liable for payment of excise duty.
17. Mr. Sinha cited a large number of decisions in support of his submissions but relied primarily upon the following :
(i) Decision by the Supreme Court in Union Carbide India Limited v. Union of India -1986 (24) E.L.T 169.
(ii) Decision by the Supreme Court in Bhore Industries Ltd. v. The Collector of Central Excise -1989 (40) E.L.T. 280.
(iii) Decision by the Bombay High Court in Tata Engineering Locomotive Company Limited v. Union of India - 1997 (89) E.L.T. 463.
(iv) Decision by CEGAT in Aruna Industries v. The Collector of Central Excise -1986 (25) E.L.T. 580.
(v) Decision by CEGAT in Collector of Central Excise v. Central Engineering Servicing Works -1989 (42) E.L.T. 104.
(vi) Decision by CEGAT in Steel Authority of India Limited v. Collector of Central Excise -1988 (36) E.L.T. 316.
(vii) Decision by CEGAT in S.A.E. (India) Ltd. v. Collector of Central Excise -1988 (36) E.L.T. 613.
(viii) Decision by the Supreme Court in Collector of Central Excise v. Ambalal Sarabhai Enterprises -1989 (43) E.L.T. 214.
18. The Revenue on the other hand maintained that the articles in question that went into the making of the Sinter Plant were excisable goods within the meaning of Section 3(1) of the Central Excise Act and the activities of the different contractors engaged by the petitioner company in setting up the Sinter Plant amounted to manufacturing activities within the meaning of Section 2(f) of the Act.
19. The Revenue too placed reliance on a number of decisions with special emphasis on a decision by the Supreme Court in Sirpur Paper Mills Limited v. Collector of Central Excise, Hydrabad. - 1998 (97) E.L.T. 3. The other decisions relied upon by the Revenue are as follows :
(i) Decision by the Supreme Court in Name Tulaman . v. Collector of Central Excise -1988 (38) E.L.T. 566.
(ii) Decision by Patna High Court in Tata Iron and Steel Company Limited v. Union of India -1988 (33) E.L.T. 297.
(iii) Decision by Bombay High Court in Kirloskar Brothers Limited v. Union of India and Ors. -1988 (34) E.L.T. 30.
(iv) Decision by CEGAT in Collector of Central Excise v. Indoprint Enterprises -1988 (36) E.L.T. 513.
(v) Decision by CEGAT in Bhartia Electric Steel Company Limited v. Collector of Central Excise - 1988 (38) E.L.T. 169.
20. I have briefly recorded the submissions made on behalf of the parties and the decisions relied upon in support of their respective submissions for the sake of the record but I do not propose to examine those submissions in any greater detail. I also do not propose to make any pronouncement on the disputed issue concerning the leviability of excise duty on the articles in question. This is because I find that the impugned order passed by the Collector is wholly unsatisfactory and it is impossible to sustain it. I have read the order carefully a number of times and I am constrained to observe that it not only lacks a proper structure but it is also quite confusing in parts. At several points, the impugned order tends to suggest to the reader that it was the Sinter Plant itself and not the structural materials, fixtures and devices that went into its making on which the duty of excise was being levied. The material part of the order beginning with the marginal heading, 'findings and discussion' begins as follows:
'The first question that arises is whether the impugned items are 'goods' or not. Goods have been defined under Section 2(d) of Central Excise and Salt Act, 1944 as under :
(A) 'Excisable goods' means goods specified in the 1st Schedule to the Central Excise Tariff Act, 1985 which are being subjected to duty of excise and includes salt. In this regard, I find that the Act does not make any distinction between the goods movable and immovable. On this point the Act is more or less silent. In the absence of any clear cut statutory provisions there is no other alternative for us except to refer to General Clauses Act. General Clauses Act is also not clear about the definition of 'goods'. Goods have not been properly and clearly defined in any of the Indian statutes. However, I find that there is a definition of 'immovable' in Transfer of Properties Act. As per Section 3 of the Transfer of Properties Act 'immovable property' does not include standing timber, growing crops or grass. In the aforesaid proviso, goods have been defined to include 'attached to earth' means :
(a) rooted in the earth, as in the case of trees and shrubs.
(b) imbedded in the earth, as in the case of walls and buildings.
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
As against this background of law, I find that in the manufacture of the said Sinter Plant and R.M.B.B.S. as, ascertained from Plant Incharge of Sinter Plant. M/s. TISCO had applied PERT (Programme Evaluation and Review Technique) and C.P.M. (Critical Path Method) for fastest implementation and finishing of the plant right from raw material stage to the stage of finished products.'
21. Now, I do not even follow the object and purpose behind this digression into the question of movables and immovables. If it was the object of the Collector to make the Sinter Plant itself the subject of excise duty and to that and he was making the proposition that immovables were equally amenable to the levy of excise, the proposition is incorrect and contrary to the law long established on the basis of a number of Supreme Court decisions. It may here be noted that even in the case of Sirpur Paper Mills Ltd. (supra), on which great reliance was placed by the Revenue it was never said that an immovable property was equally covered by the charging section of the Central Excise Act but it was found and held that the Paper making machine which was assembled and erected by the manufacturer at its factory site was not an immovable property as something attached to earth like a building or a tree.
22. On the other hand if the Collector was proceeding to levy excise on the structural materials, fixtures and devices which came into being at the intermediate stage and went into the making of the Sinter Plant the entire question of movable and immovable was without any purpose because it is no one's case that those articles were not movables. All that is contended by the petitioner is that those articles went into the setting up of the Sinter Plant as its integral components.
23. Further, the references to programme evaluation and review technique and critical path method only reveal a lack of application of mind because the aforesaid 'technique' and 'method' related only to the time schedule of the installation process and were intended to complete the installation of the plant within a time bound schedule. The Collector was hardly justified in referring to the aforesaid technique/method for holding that the articles in question came into being as a result of a manufacturing process.
24. Again the important question whether those articles were capable of being bought and sold in the market has been dismissed by the learned Collector in just one sentence which is as follows :
'The term marketable means capability of being sold in the market and not that it should be actually sold.'
25. There can be no quarrel with this observation as an abstract proposition but the whole question in this case is whether or not those articles were capable of being sold in the market. The definite case of the petitioner is that the structural materials fixtures and devices were forged for being integrated into its Sinter Plant and those were, therefore, fabricated according to the specified designs and sizes. It follows, therefore, according to the case of the petitioner, that those articles could not be sold in the market as any commercially known commodity but could be sold, if at all, only as iron and steel scrag. In the impugned order, there is no reference to any material to rebut the petitioner's contention and I think by simply stating a proposition in the abstract it cannot be held that the articles were in fact capable of being bought and sold in the market. ,
26. Yet, again dealing with the question whether the payment of excise duty would be the liability of the petitioner or the contractors, the learned Collector seems to have glossed over the issue and has referred to the setting up of the Sinter Plant, as if that was the taxing event. The following is the relevant passage in the impugned order :
'As per Section 2(f) of the Act which reads as the word manufacture shall be construed accordingly and shall include only a person who employees hired labour in the production of manufacture of excisable goods, but also in person who engage in their production or manufactures on his own account. M/s. TISCO has not only supplied the raw materials but they have supplied consumables etc. and also drawing and design of the plants. In view of this I hold that the contractors were not working under M/s. TISCO and hence they are not independent manufacturer of Sinter Plant No. 2 and R.M.B.B.S.'
27. These are only some of the errors in the impugned judgment which I have referred to above.
28. For the reasons discussed above, I find and hold that the impugned order dated 22-11-1990 passed by the Collector, Central Excise, Patna, as contained in Annexure-1 is unsustainable and is fit to be set aside. I accordingly set aside the impugned order. The matter is remitted to the Collector to pass a fresh order, after hearing the petitioner, in accordance with law and in the light of the observations made in this judgment.
29. It has been indicated above that we did not send this case to the appellate authority on account of its long pendency in this Court. We, therefore, wish to make it clear that in the event any party, the petitioner or the Revenue, is aggrieved by the order of the Collector, it would be open to it to seek relief before the appellate forum as provided under Section 35B of the Central Excise Act. This Court would not appreciate any of the parties coming to it directly against the order passed by the Collector on any plea based on this judgment or the earlier judgment of this Court.
30. In the result this writ petition is allowed to the extent indicated above but with no order as to costs. Petition allowed.