COMMISSIONER OF CENTRAL EXCISE Vs. PREM FABRICATORS

JUDGEMENT

(1.) Tax Appeal No. 2435 of 2009 has been filed by the Department against one Prem Fabricators. Whereas, Tax Appeal No. 446 of 2011 is filed by Messrs. Prem Fabricators. Both appeals arise out of common judgment of the Central Excise & Service Tax Appellate Tribunal, West Zone Bench ["CESTAT" for short] dated 3rd September 2009 [, : 2010 (250) E.L.T. 260 (Tribunal)]. Briefly stated, the facts are as follow:- Messrs. Prem Fabricators is engaged in the work of fabricating steel structures. It received two work-orders from the Central Warehousing Corporation ["Corporation" for short] both dated 18th October 2006. These work orders were valued at Rs. 4.61 crores [rounded off] and Rs. 4.04 crores [rounded off]. First of the two contracts was for supply of fabricated pre-engineered steel structures for the warehouse as per the approved drawings of the Corporation. The second work order similarly was for supplying at site steel work in built-up square and rectangular closed hollow sections, and other related structures required by the Warehouse Corporation. Such structures were to be supplied at the Corporation's site at Mundra.

(2.) The manufacturer cleared goods from its factory site situated at Kathwada without payment of duty under A.R.E.-1 invoices, claiming that by virtue of Exemption Notification No. 58/2003-C.E., it carries no liability to pay duty, After such clearances in the month of December 2006 to February 2007 totaling valued at Rs. 5,50,28,186/- from its factory to the Central Warehousing Corporation, Mundra, the Department issued a show cause notice dated 20th December 2007 why Central Excise duty of Rs. 89,80,600/- be not recovered under Section 11A(1) of the Central Excise Act, 1944 ["Act" for short] with interest under Section 11AB of the Act, and further why penalty should not be imposed under Section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002.

(3.) The manufacturer responded to the show cause notice raising several defenses. Though initially, stand of the manufacturer was that by virtue of Exemption Notification No. 58/2003-C.E. no excise duty was payable, in reply to the show cause notice, main stand adopted was that the entire fabrication work was executed at the site of the Central Warehousing Corporation and that therefore, by virtue of Notification No. 3 of 2005 dated 24th February 2005, the goods would attract "nil" rate of duty.