CIMMCO BIRLA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant M/s. Cimmco Birla Limited, are a contract manufacturer of railway wagons for the Indian Railways, The inputs required for the manufacture is supplied by the Railways to the appellant; they receive only job work charges. The work involved is basically one of fabrication and assembly. Railway wagons were exempted from central excise duty with effect from 1 -3 -93. Parts required for the manufacture of wagons exempted a short while later with effect from 3 -5 -93. Thus, parts became liable to duty during the interim period. Duty demand was raised on the appellants contending that in the process of fabrication of railway wagons the appellant manufactures railway wagon parts, viz., Under frame, floor, body, door and undergear and that these parts were liable to central excise duty under tariff Heading 8607 of the central excise tariff during the period 1 -3 -93 to 3 -5 -93. The duty demands was confirmed and penalty imposed under orders of adjudication and appeal. The present appeal is directed against those orders.

(2.) ALL along the contention of the appellants has been that the Revenue is in error in alleging that the appellant manufacture parts first and then assemble them into wagons. According to them fabrication of a wagon is a continuous activity involving working on plates and sheets of iron and parts do not emerged as identifiable goods in between. It is their contention that the duty demand is in violation of the settled principle that only goods are liable to central excise duty and, to be goods, items should be marketable. They have contended that there is no market for these items, which have emerged at intermediate stages in the manufacture of railway wagons, and these are not marketable. They have also produced a certificate dated 4 -8 -93 from Director, Railway Stores, Ministry of Railways stating that "under frame, body sides, body ends roof and floor etc. are stages in the process of manufacture of wagons. These are not distinct commercial items and cannot be marketed as such. Therefore, these cannot attract excise duty under Tariff Item 8607.

(3.) THE lower authorities rejected the contentions of the assessee. Commissioner (Appeals) has noted that wagon parts are covered by a distinct Tariff Heading 8607. These are not perishable. These are identifiable as parts by their particular names viz. Under frame, floor, body, door and undergear etc. It is not denied that these items are transportable. The Railways/any other person desirous of assembling the wagons can in fact purchase any of these items from any wagon manufacture to assemble fresh wagons or to repair existing wagons. The order also relied on a decision of the CEGAT (Final Order No. 600/2000 -B, dated 19 -4 -2000) [2001 (130) E.L.T. 942 (T)], wherein it was held that bogie side frame is classifiable under 86.07. The certificate of the Railway Ministry was rejected on the ground that non -purchase of these items in actual practice does not make them non -marketable, being suitable for sale.