ALKARMA Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE first appellant, M/s. Al -karma, New Delhi is a civil contractor engaged in the manufacture of 'curtain walls' and other structural works. It undertook several important projects like providing, fixing and erecting of aluminium doors, windows, curtain walls on big commercial buildings like 'Signature Tower', and 'Global Business Park' at Gurgaon and 'Capital Court' at Delhi. The nature of the work carried out is brought out by the pictures of some buildings reproduced below: ELEVATION AFTER COMPLETION OF CURTAIN WALL AT SIGNATURE TOWER, GURGAON ELEVATION AFTER COMPLETION OF CURTAIN WALLS & CLADDING & WINDOWS AT SIGNATURE TOWER, GURGAON. While the construction of the curtain walls etc. are at site on already completed buildings, the metal elements required for the construction are prepared in the appellant's factory.

(2.) THE appellant took central excise registration for the factory and cleared the elements after payment of central excise duty. The goods were described in the clearance documents as aluminium doors, windows, frame work and multiple aluminium sheets etc. The items cleared from the factory were moved to work sites and utilised there along with other items for erecting curtain walls and other structures. These duty paid clearances went on from 1997 -98 to 2000.

(3.) ON 12th January 2000, the appellant addressed a letter to the jurisdictional Deputy Commissioner pointing out that it has been advised that its activity is not excisable and no duty was required to be made. Subsequently, on 22nd March 2000, the appellant's premises were searched by Central Excise officers. The investigation that was so commenced led to the issuance of show cause notice dated 7 -12 -2002 alleging that the appellant had evaded central excise duty. The appellant resisted the demand but failed. Under the order of adjudication dated 31 -3 -2004, the Commissioner, Central Excise, held that the appellant had evaded duty by undervaluing the products cleared by it. Commissioner took the total receipts disclosed in appellant's Balance Sheets from year to year as the value of the items manufactured in its factory. It was held that since the cost of fixing and erecting the items at site were not separately available, the entire receipts shown in the Balance Sheets were to be treated as value of goods manufactured in the factory and duty demanded. Thus, the duty demand of over Rs. 4.5 crores remains made for the years from 1997 -98 to 2001 -02. We may note the table under para 50 of the Commissioner's order: