1.1 The appellants M/s. Aska Equipments Ltd. a limited company is engaged in the business of trading in Tower structures fitted with light bulbs called Telescopic Tiltable Lighting Towers (Lighting Towers). These Towers are of various types from 6 mtrs. to 18 mtrs.
hight and would fall under heading subheading 8543.00 of CETA, 1985 if not embeded to earth. The appellants have their godown at K-21, MIDC, Hingna Industrial Estate, Nagpur and their Office at Gargashraya's Civil Lines, Nagpur and are registered with the Sales Tax Authorities.
The other appellant is the Managing Director of this Trading Company.
1.2 Orders for erection/supply of 'Lighting Towers' in various places all over India are obtained and thereafter orders placed with other companies, who are manufacturers of 'Lighting Towers', which are (i) M/s. Telekrik Electricals (hereinafter as TELEKRIK), W-47, MIDC, Hingna Rd, Nagpur (ii) M/s. Orbit Industries. (hereinafter as ORBIT), U-123, MIDC, Nagpur.
They are manufacturers independently are engaged in the manufacture of such Towers and are registered with the Central Excise Department for such activity.
1.3 While placing the orders, the appellants week for delivery of Lighting Towers, complete in all respects, mentioning therein that (i) quality control testing will be done by the said manufacturers before removal from their works (ii) Lighting Towers after due inspection will be directly dispatched to the Consignees (i.e. parties who placed orders with the Trading Company) being the ultimate customers of the Appellants as the Trader. In short the said manufacturers were directed to dispatch fully manufactured Lighting Towers to ultimate customers on Appellants' account. The above said manufacturers procure/purchase the required materials and create the Tower and place the electrical components as per requirements. They affix stickers of "Aska" on such Towers, supplied to the appellants since they are also manufacturing goods for parties other than the Trading Company who are appellants herein.
1.4 The said Lighting Towers are then directly supplied to the appellants or customers by the said manufacturers. The lighting towers at the manufacturers' end are complete in all respects, only for ease of transport the said lighting towers to the site of the customers, the same is removed in dispersed i.e. CKD/SKD component form and at site all such CKD/SKD components & parts i.e. control panel and the illuminaries are just fitted to obtain the steel tower structure, then the lighting are installed at site.
1.5 In some cases, when it is inconvenient, the said manufacturers only carry the Steel Tower structure and Control Panel to the site of the customers and the illuminaries purchased by them are called for directly at the site and then at site the said illuminaries are just affixed to the Steel Tower structure i.e. the Lighting Tower is installed at the customer's site.
1.6 Under the aforesaid factual position, based on alleged intelligence that the Appellants, TELEKRIK and ORBIT the independent manufacturers were interconnected/interrelated concerns, in as much as Director of Appellant Company, Shri Ashish Garg was Director of TELEKRIK before joining Appellants and that, Shri Harikumar, Proprietor of ORBIT was Authorised Signatory of TELEKRIK before formation of ORBIT. Factory premises of TELEKRIK and ORBIT and office premises of Appellants were visited by the Central Excise Preventive Officers on 7.1.2003 and certain records were withdrawn from the office premises of the Appellants, including the invoices under which goods were dispatched to various customers. Based on the scrutiny of records withdrawn, statements of concerned persons and the reports received from the various Central Excise Officers having jurisdiction over the ultimate customers a show cause notice was issued.
2. A Show Cause Notice issued was contested. However, the Ld.
Commissioner by the order impugned dtd.31.3.05 has confirmed the demand of Rs. 56,01,442/- on this Trading Company after allowing the permissible deductions from cum-duty price and also has imposed penalty of equivalent amount under Section 11AC and Rs. 5,00,000/- under Rule 173Q demand with interest under Section 11AB and penalty, on the Managing Director, of Rs. 1,00,000/- under Rule 26 of erstwhile Central Excise Rules 2001 and Rule 210A of the Central Excise Rules 1944 read with Section 38A of Central Excise Act, 1944. Hence these appeals.
3. After hearing both sides and going through the records, it is found that (a) while the appellants vehemently claimed that the activity carried out by the them is a trading activity (i) on the basis of the report received from jurisdictional Asstt.
Comr. of the appellants' customer i.e. M/s. Neyveli Lignite Corpn Ltd. it appeared that, appellants have manufactured and supplied the towers to the firms mentioned in Annexure - 3A to the notice. The reports received from jurisdictional Asstt. Commr. of the appellants' customers viz. M/s. L & T Hochtief Plant, Karwar M/s.
Hindustan Construction Company Ltd. Airport Authority of India, Amritsar & Thiruvananthapuram clarify that the said customers have confirmed that the lighting towers were received by them under the cover of invoices of the appellants, who have supplied the lighting towers and have raised the bills towards the same; (ii) the activities carried out by the appellants at its premises were found to be well covered under the definition of manufacture, as the appellants procure the orders from customers, then get the tower structures fabricated from the said manufacturers and appellants attach the essential lighting components to it and thereby manufactured the final product viz. Lighting tower classifiable under Heading No. 85.43; (iii) It is observed from the records that the said manufacturers have raised invoices towards the supply but these invoices have never reached the ultimate customers and were lying in the office of the appellants. In view that the goods were received by the customers under the cover of invoice of appellants along with transportation documents & packing slip; sticker "Aska" was affixed on the tower after assembling ; the components/tower structures have been taken to the site by the appellants and got assembled there; (iv) It is found that the appellants have got manufactured, the steel tower structure from their hired labour i.e. the said manufacturers, carried the same to the site and assembled it there resulting, a new commodity under the name of "lighting towers" emerging which is classifiable under Heading 85.43 (v) that the SC judgment in the case of Triveni Eng. 2000(120)ELT273 (SC) & Tribunal's decision in the case of T.T.G. Ind. 1996(82) ELT 517 (T) are relevant in the present case, wherein it was held that assembling at site of bought out and own components amounts to manufacture & as per second part Section 2(f) "manufacturer" shall include a person who engage others to get the excisable goods produced or manufactured on his own account and need not be an actual manufacturer of excisable goods produced or manufactured (i.e. engaged in de facto manufacture), yet he would be regarded as a manufacturer (i.e. a de jure manufacturer) within the meaning of Section 2(f) (vi) that the following judgments support the findings of appellants as the manufacturers: (vii) that the appellants activity cannot be considered as trading activity in view of their charging sales tax @ 4% for supplied in Maharashtra State & that the appellant have prepared a Goods Inspection report for each Lighting Towar at K-21, MIDC, Nagpur, which clearly indicates that the lighting towers have come into existence and thus manufactured at K-21, MIDC, Nagpur. Appellants are manufacturers, considering the Warranty given by the appellants to its customers at various locations and the Job Completion Certificate issued by customers are in the name of appellants.
Therefore the Certificate issued by a Chartered Engineer, relied by the appellants is not relevant & the affidavits are mere afterthought to mislead Dept (viii) the contention of the appellants that the lighting towers being immovable items are not chargeable to Central Excise duty is not correct in view of the fact that item assembled at site and subsequently installed can easily be dismantled without application of considerable labour or without causing any substantial damage to its components and can be reassembled at a new site and the goods assembled/installed at site are capable of being sold or shifted as such after removal from the base since after fitting of the lights/illuminaries and installation of the Mast Lighting Control Panel the structure attains the properties of the Lighting Tower and, hence, the end use/function of goods is relevant for classification under heading 85.43 (ix) As no records furnished in respect of expenses incurred on bought out items to substantiate the appellants' claim for adjustment of credit of duty paid on the said items since the appellants were admittedly not registered with the department and the said manufacturers of steel structure had surrendered their registration certificate quite long back, demand not time-barred.
4. It is a fact that M/s. Orbit and M/s. Telekrik were not given an opportunity while issuance of show cause notice to substantiate their identity as an independent manufacturer would render the present findings of the Commissioner to be not in fairness and biased therefore void.Telekrit Electricals (Nagpur) Pvt. Ltd. v.Commissioner of Central Excise and Customs, Nagpur the Tribunal had determined the issue of valuation and manufacture of such Lighting Towers by one of the manufacturers from whom the appellant herein get their Tower manufacturered. When such manufacturers has been accepted, by the Tribunal, to be a manufacturer of Lighting Tower, then holding the present appellants as manufacturers bf such Tower manufactured by M/s. Telekrit would not be called for, when they are only Traders and get the Towers manufactured from M/s.
Telekrit who is held to be a manufacturer. In this case, the Tribunal had also added the cost of bought out items i.e. electrical components such as bulbs, lights, mast lighting control panel etc. to be included to determine assessable value for discharge of duty. Therefore, demands made on the appellant, before us, by considering them to be a manufacturer under the Central Excise Act, 1944 are to be held is mis-directed demands, since these appellants can not be held to be the manufacturer of the goods.
6. As who is the manufacturers when goods are got manufactured on job work has been settled by the apex court in the case of Ujjager Prints, wherein it has been held that and it is the job workers who is the manufacturer, every if the raw material has supplied by Traders. In the case before us, the job workers process the raw material and fabricates the Tower & installs the electricals/bulbs etc. whose value is to be added by the decision of the Tribunal to the assessable value of such Towers. Therefore, the Trader herein can not be an assessee under the Central Excise Act, 1944.
The reliance of the Commissioner on the decision of Shree Agency - 1977 (1) ELT (J-168)(SC) to call the Traders herein as the manufacturer cannot be upheld, as in that case yarn had been sold to the Weavers by Shree Agency and thereafter woven textiles were being purchased, at a cost raised by the price of weaving to the cost of yarn sold by Shree Agencies. Therefore, the Apex Court, in the facts of that case, held Shree Agency as the manufacturer of the goods under dispute in that case. In the case before us, the appellant did not supply or sell or otherwise direct the job workers to procure the raw materials they only specify the quality or a specification of the Towers required to be manufactured, they therefore cannot be held to be a manufacturer, the Tribunal has already held one of such job workers vis. M/s. Telekrit Electricals (Nagpur) Pvt. Ltd. to be a manufacturer of the said Towers, who is to discharge the duty of the Towers on total value of the Lighting Tower including electrical fittings/bulbs etc.
7. The fact that the appellant had claimed before the Government companies, who are the buyers of the Towers that they manufacture the same or that they give warranty, cannot be a reason to conclude that they would be covered by the definition of manufacturer under the Central Excise Act, 1944, in view of their job workers being held to be an independent manufacturer of the very same goods as also the law as laid down by the apex court that it is the job workers who is processing the raw material, who is a manufacturer under the Central Excise Law. The placing of a sticker on the Towers showing the Brand name of the appellants will not render the appellants as a manufacturer of the Towers. Such branding affixations may only deprive the job worker-manufacturer of the Small Scale Exemptions. Duty demands pursuant to denial/ineligibility of the benefit of notification can not be made on the appellants.
8. The law on excisability of goods assembled and installed at site is well settled, see TTG 2004 (167) ELT 501 Triveni Engineering Industries SC Para 22 and the CBEC Circular No. 58/1/2002-CX dtd.15.1.02 {Para 4 (vi)} and following this settled position, we find no reason to upheld the Commissioner's order, by holding the appellant company to be manufacturer of the Towers erected at site which are affixed/embeded to earth/Civil structure.
9. In the present case, the Commissioner has ignored the ratio of the law well settled as regards immovable property not having capacity of moving from one place to other not to be exigible. It is found that the Ld. Advocate for the appellant relied upon the decision in the case of Central Coalfields Ltd. (Tribunal) v. Collector of Central Excise, Jamshedpur that the Tribunal in that case had held that lighting towers when they come into existence are embedded into the earth would not be leviable to duty applicable as on such lighting towers relying on the decision in the case of Aruna Industries . We find no reason to differ with the settled 10. In view of the findings arrived, we can not upheld the duty demand and penalty as arrived at, on the appellants before us, The same are set aside and the appeals are allowed.