1. The brief facts of the case are that M/s Ajit India Private Limited (hereinafter referred to as the "assessee") are engaged in the manufacture of Aluminium doors and windows, curtain walls and glazed windows falling under chapter heading 7610.90 of Central Excise Tariff.
An intelligence was gathered that the said assessee was indulging in evasion of central excise duty by misdeclaring that they are manufacturing only aluminium doors and window frames whereas they received orders from various customers for the manufacture and supply of curtain walls, glazed windows, aluminium doors and windows, and not only for frames.
2. It was found that the assesses fabricated aluminium window frames in the case of openable windows (R-series windows) and aluminium channels for sliding windows, and cleared the same in a dismantled condition/knocked down condition from their factory premises. The glass panes for these windows/doors were purchased and sent directly to the site where all these parts were assembled by screwing them in their respective positions. Thus the doors and windows were assembled. Duty liability was discharged only on aluminium channels and frames and not on the complete doors/windows. Acting on the above intelligence, Central Excise Officers searched the office premises of the assessee on 08/07/1997 and seized finished goods valued at Rs. 8,36,816/- lying in the factory without being accounted for in the R.G.1 register. Scrutiny of the records showed that the assessee received orders for supply of complete windows, doors, structural glazing and curtain walls.
Aluminium frames and channels were dispatched to site where glass sheet were sent directly at site and parts were assembled to make complete windows/doors. In the case of certain structural glazing, the glass was glued on to the frame in their factory premises itself and cleared piece meal to the site. The statements of the director of the assessee, and its Assistant Sales Manager and Works Manager were recorded. In addition to the above, the statement of Managing Director was also recorded as well as that of the Labour Contractor. Based on the above, show cause notice was issued on 02/01/1998 proposing the adoption of value declared in the commercial invoices for manufacturing and supplying of doors and windows as assessable value under Section 4 of the Central Excise Act 1944, after allowing permissible deduction, proposing recovery of differential duty of Rs. 36,40,223/-, confiscation of seized goods, confiscation of land, building, and plant & machinery used in connection with the manufacture of excisable goods and also proposing levy of interest and penalty. The notice was adjudicated by the Commissioner, who confirmed the duty demand under Section 11A (2) together with interest at the rate of 20% as imposed under Section 11-AB, imposed penalty of equal amount under Section 11-AC of Central Excise Act, 1944, confiscated land, building, and plant & machinery of the appellant with option to redeem the same on payment of fine of Rs. 1.00 lakh, confiscated seized goods with option to redeem the same on payment of fine of Rs. 2.00 lacs, imposed penalty of Rs. 50,000/- on the Managing Director of the assessee and Rs. 25,000/-each on two directors under rule 209A of Central Excise Rules 1944. Hence these appeals.
3. We heard both sides. The relevant findings of the Commissioner on the items being assembled at the site are herewith reproduced below: "In the instant case, the assessee fabricated the aluminium windows frames and aluminium channels as per the size of the sliding window in their factory and cleared the same in dismantled condition/knocked down condition, on payment of Central Excise Duty to the side. The assessee bought glass panes from the market and sent the same directly to the site where all these parts were assembled by screwing them in their respective positions. Thus, the issue involved is whether the cost of bought out goods supplied at site and the charges for assembly at site should be added in the assessable value under Section 4 of Central Excise Act, 1944 for the clearances from the factory after allowing the permissible deductions.
It has been contended by the assessee that they were engaged only in fabricating and supplying aluminium sections and were not engaged in supply of the products, namely, windows and doors. I observe in this case the said assessee received orders for the supply of complete doors, windows, structural glazings and curtain walls from the customers. Though the orders were for fabrication as well as installation, the said assessee cleared only frames and the parts of windows/doors. Besides, they also fabricated and cleared cut to size channels for sliding doors and windows. The assessee also prepared Central Excise invoices in the name of the customers and the goods were dispatched to the site. The glass sheets for these doors, window were bought and sent directly the site. At site these parts were assembled together while erection was done by the contract labour employed by the said assessee. The possession of the goods continued to remain with them and that goods were not handed over to the customers till the fabrication at the site and final erection and installation were complete".
4. In view of the above, he has held that the assessee manufactured the assembled doors and windows at site. In the light of this factual background, the decision in the case of Mahavir Aluminium Limited v.Commissioner of Central Excise, New Delhi 2003 (153) E.L.T.65 (Tri. - Delhi) is squarely applicable. The Tribunal has held that Excise duty is not leviable on doors and windows coming into existence at site i.e.
on the respective floors of the building of the company premises and even embedded into wall for the reason that twin attributes of mobility and marketability are not satisfied. They have followed the Supreme Court judgment in Municipal Corporation of Greater Mumbai v. Indian Oil Corporation (AIRTriveni Engineering Industries Limited v. Commissioner of Central Excise 2000 (120) E.L.T. 273 (SC) (Tribunal decision has considered the earlier decision of the Supreme Court in Sirupur Paper Mills Ltd [1998 (97) ELT 3 (SC) ] relied upon by the Commissioner in the present order).
5. The appeal by Revenue against the Mahavir Aluminium order has been dismissed on the ground of delay. Following the ratio of the above Tribunal decision, we held that duty demand is not sustainable and accordingly set aside the same and also set aside penalties imposed on the assessee and its officers. The confiscation of land, building and plant & machinery is also set aside in the light of the above. As regards confiscation of goods seized on 08/07/97. we affirm the same, as the goods were found to be in fully finished condition and yet not accounted in the HG1 register. The plea of the appellants that the goods had not yet reached RG1 stage, as they were not fully finished, is not tenable in view of the acceptance of the Panchnama, which shows that they were in fully finished condition and the defence that the goods were not yet fully finished was raised only at a later date namely, at the time of filing to the reply of the show cause notice. We also see that no reason to interfere in the quantum of redemption fine.
6. As we have held in favour of the assessee on the merits of the demand, we have not recorded any findings on the other pleas of time bared, jurisdiction and liability of job worker and not the assessee, to duty.
5. In the result, we uphold the confiscation of seized goods while setting aside duty demand and penalties and confiscation of land, building and plant & machinery etc.
7. Appeal No. E/195/99 is thus partially allowed while other three appeals are allowed in toto.