NEWTON ENGG. AND CONSTRUCTION Vs. CCE

JUDGEMENT

(1.) In these 4 appeals arising out of a common Order -in -Original No. 25/2003 dated 6.1.2003, the issues involved are whether the pipes and fittings of various specifications are liable to Excise duty and whether the benefit of Notification No. 67/95 -CE is available.

(2.) Shri Arun Khosla, learned Advocate, submitted that the Appellant No. 1 was awarded a contract for the fabrication of 2.121 km. pipes and fittings of various specifications made out of mild steel plates for utility i.e. piping for circulation of water from the cooling tower to the various heat exchanger; that the steel plates are cut according to the diameter of the pipe and the same are bended to make a pipe, two edges are then welded to form a spool. Similarly elbow and reducers are also fabricated from M.S. Plates. The spools are then joined by reducers as per requirement and the pipeline so formed is laid in trenches at a depth of 2 to 3 metres. He, further, submitted that as per the settled law the pipe was so fabricated and laid in trenches are not goods for the purpose of levying Central Excise duty as the same are not movable and cannot be brought to the market for sale of purchaser. He relied upon the Circular No. 58/1/2002 -CX dated 13.1.2002 issued under Section 37B of the Central Excise Act according to which pipes embedded into earth are not movable, not chargeable to Excise duty; that relying upon the said Circular the same Adjudicating Authority has held that the steel tanks which were fabricated in the premises of Chambal Fertilizers and Chemicals Ltd. are not chargeable to Excise duty under Order -in -Original No. 73/2003 dated 2.7.2003; that however, the Commissioner has not followed the said 37 -B order observing that the said order refers to the manufacturing activity which results in the construction of immovable property, for example, erection/fabrication of storage tank by the oil company or erection of gateways at dams whereas the product manufactured by the Appellant No. 1 are bought and sold in the common trade and the pipe can be transferred from one place to another place. Finally he submitted that they had claimed the benefit of exemption under Notification No. 67/95 -CE which exempts capital goods as defined in Rule 57Q of Central Excise Rules, manufactured in a factory and used within the factory of production; that pipes fabricated by them are capital goods and are used within the factory of production; that the Commissioner is silent about availability of Notification No. 67/95 in the impugned Order. Learned Advocate placed reliance on the decision in the case of Treveni Engg. and Industries Ltd. v. CCE, Allahabad, 2000 (36) RLT 619 (CEGAT).

(3.) Countering the arguments Shri D.N. Chaudhary, learned SDR, submitted that Commissioner has given a very specific finding in the impugned Order to the effect that the activity undertaken by the Appellant No. 1 M/s. Newton Engg. and Construction Co. results in the manufacture of excisable goods which are known as pipes in the common trade parlance; that it cannot be accepted that they are not goods on account of abnormal size, volume, and weight; that the manufacturing activity for the manufacture of pipe and fittings had already been undertaken by them before the same are embedded, buried underground; that the particular order issued under Section 37B of the Central Excise Act is not applicable to the facts of the present matters as the said order refers to the manufacturing activity which results in the construction of immovable property such as fabrication of storage tank by the oil company or erection of gateways at dams which are erected on concrete foundations; that the pipes have come into existence before the same were put inside the trenches and as such they are movable and liable to excise duty; that Notification No. 67/95 is not available as Newton Engg. and Construction Co. who have manufactured the pipes have not used the same captively.