LARSEN AND TOUBRO LTD. Vs. CCE, INDORE-II

JUDGEMENT

(1.) THE applicants M/s. Larsen & Toubro Ltd. manufactured, erected and set up a plant to manufacture Cement in the factory of M/s. ACC. Three show cause notices were issued inter alia alleging that in execution of this project M/s. Larsen and Toubro Ltd. manufactured identifiable parts of machinery etc. on which they did not pay duty and also that they did not follow the required procedure. It was further alleged that the entire plant so erected was also dutiable and that the duty payable on such plant was evaded. After hearing M/s. Larsen and Toubro, the Commissioner passed single order confirming a total of duty amounting to Rs. 14,53,95,336/ - and imposed two penalties of equivalent amount under Section 11AC of the Central Excise Act, and another Rule 173Q of the Central Excise Rules, 1944. M/s. Larsen and Toubro then filed an appeal and the present application for waiver of pre -deposit of the duty confirmed and the penalties imposed and stay of recovery thereof during the appeal proceedings. We have heard Shri Atul Setalwad Sr. Counsel appearing along with Shri Prakash Shah Ld. Counsel for the applicants and Shri K.L. Ramteke for the Revenue.

(2.) FOR the parts of machinery etc. manufactured on the ground by the applicants in the clients factory, the Commissioner extended the benefit of Notification No. 67/95 -CE dt. 16.3.1995, but for the entire plant, he declined to extend the benefit on the ground that the appellants had not used the plant in the manufacture of other goods. He observed that before the plant was put to use, it was cleared by M/s. Larsen and Toubro to M/s. ACC and therefore they did not have any claim for the benefit of this Notification for the entire plant. He also rejected the claim of the appellants that the plant being embedded to the earth was not 'goods' in terms of the Central Excise Law, basing his opinion on the strength of the Supreme Court Judgment in the case of Sirpur Paper Mills Ltd. v. Commissioner (1998 (97) ELT 3 (SC) :, 1998 (74) ECR 1 (SC)). In this Judgment it was held that where the piece of machinery was embodied in earth for operational efficiency and for security, it could not be termed as immovable property.

(3.) SHRI K.L. Ramteke Ld. DR attempted to put forth the Supreme Court Judgment to the case of Sirpur Paper Mills Ltd. v. Commissioner. We find that the applicants have relied upon the Tribunal Judgment in the case of Commr. of Cen. Ex. Madras v. Chemtec Water Conditioners Pvt. Ltd. (2000 (115) ELT 135 (Tribunal)). In this case the Tribunal distinguished the Sirpur Paper Mills Ltd. Judgment and held that where the Machinery etc. were permanently grounded to floor with concrete the same could not be termed as goods.