KEC INTERNATIONAL LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The order impugned in this appeal confirmed a duty demand of over Rs. 54 lakhs in respect of "Cantilever Assembly" purportedly manufactured by the appellants, M/s. KEC International Ltd. It also has imposed an equal amount of penalty on the appellants. In addition is the demand for interest in respect of the duty amount.

(2.) Allegedly cantilever assembly comes to be manufactured by the appellants during the execution of contract for Railway Electrification of Ambala Cantonment - Ludhiana Section of rail track. The contention of the appellants is that the Electrification project was a work contract and the alleged fabrication of 'Cantilever assembly' was part of the project. With regard to the cantilever assembly, it is pointed out that the cantilever assemblies are assembled and fixed on electric poles which are cemented to the ground. It has been explained that a cantilever assembly consisted mainly of three tubes fixed on to a post. The tubes are connected at the required angles on the specified place of the post. The three tubes are called stay tube, bracket tube and register arm tube. It has been pointed out that tubes themselves are iron rubes cut to the required sizes and on the cut to size tubes, holes are drilled to facilitate connecting them with each other. The connection among the tubes is made only on the electric post at the time of assembling and fixing. Thus, the cantilever assembly comes into existence as a part of immov - able structure. The main function of the cantilever assembly is to support, and keep in place, electric energy carrying wires and cables.

(3.) Essentially the submission on behalf of the appellant is that cantilever assembly is not a product manufactured in the factory and sold as such in the market. Instead, it comes into existence at site, upon assembly on a pole. And upon assembly at site, it becomes a part of an immovable structure i.e., a pole fixed on the ground. The appellants have contended that the fabrication of the cantilever assembly is not a manufacturing activity but a construction activity. It is also pointed out that such a construction activity does not bring into existence goods, inasmuch as the goods are by their very nature, things which can be brought to market and traded, while structures are immovable properties which lack the characteristic attribute of mobility. During hearing of the case, the learned Counsel for the appellants submitted that it is well settled (Commissioner of Central Excise, Nagpur v. Wainganga Sahkari S. Karkhana Ltd., 2002 (142) E.LT. 12 (S.C.) that columns and purlins etc. fabricated at site cannot be taken as goods. The learned Counsel also pointed out that cantilever is "a long projecting beam or girder fixed at only one end, used chiefly in bridge construction, a bracket or beam supported .......". (The Concise Oxford Dictionary - 10th Edition) and submitted that such a construction cannot be called excisable goods.