PUNJAB PROJECT & CONSTRUCTION Vs. CCE, BHUBANESWAR

JUDGEMENT

(1.) THESE appeals arise out of a common order passed by the Collector of Customs and Central Excise, Bhubaneswar dated 11 -12 -1992. Under the impugned order demand of central excise duty amounting to Rs. 27,28,710/ - against M/s. Punjab Project and Construction Co. Ltd. and M/s. NALCO Ltd. was confirmed and a penalty of Rs. 2,00,000/ - each was imposed on them under Section 173Q of the Central Excises and Salt Act, 1944. Aggrieved by the above order Appeal Nos, E/349/93 -B and E/68/93 -B are filed by M/s. Punjab Project and Construction Co. Ltd. and M/s. NALCO respectively.

(2.) IN the year 1985 the above mentioned parties had entered into a contract for fabrication and erection of Pot Shells by M/s. Punjab Project and Construction Co. Ltd. at the premises of M/s. NALCO. The work was completed in 1986. Show cause notice was then issued on 18 -5 -92 proposing to levy duty on the manufacture of Pot Shells. While confirming the demand the Collector took the view that Pot Shell is distinct from the raw materials used in the manufacture of the same, has distinct name, character and use and therefore, an excisable goods. It was further held that M/s. Punjab Project and Construction Co. Ltd. as well as M/s. NALCO are manufacturers of the goods and therefore both are liable to pay the duty.

(3.) THE main contention raised by M/s. Punjab Project and Construction Co. Ltd. in their appeal is that fabrication of Pot Shells which formed integral part of the Aluminium Smelter Plant of NALCO does not result in 'production of excisable goods' since they are not marketed and are also not marketable being tailor -made according to the design specified by NALCO and are specially designed for their plant. These parts are not bought and sold in the market in the course of trade and therefore, they are not excisable goods.