PARRY & CO. LTD. Vs. CCE

JUDGEMENT

(1.) This appeal arises from Order -in -Original No. 14/2000 dated 1.5.2000 by which the CCE Trichy has passed the order on account of his earlier order being set aside by the Tribunal and matter being remanded for de novo consideration. The question that was referred back to the Commissioner for de novo consideration was as to whether assembly of various parts and accessories at site would bring into existence generator set for the purpose of classification under Chapter Heading 85.02 of CETA 85 of it is an immovable property as contended by the department, as it is set up as power plant brick by brick and fixed to the earth and make it an immovable property. Therefore, it is not exigible. The department did not produce any evidence of any experts or any other material, technical or oral for the purpose of considering the activity to be of manufacture of goods and not an immovable property. However, the department had relied on the statement of Shri S. Viswanathan recorded on 8.7.93 and on that basis had issued a show cause notice as late as 19.1.99 alleging wilful suppression with intention to evade payment of Central Excise Duty with regard to manufacture of clearances of generator set alongwith its auxiliary without intimating the department. It had been alleged that appellants had manufactured and cleared "diesel generator sets" in a manner otherwise than as provided under the Central Excise Act, 1944 and Rules made thereunder without payment of Central Excise duty and observing any formalities and as such extended period of five years is invokable under proviso to Section 11A(1) of the C.E. Act. The statement of Shri S. Viswanathan was referred to in SCN and to the Clause 9.1 of the contract entered into between the appellants and M/s. Neyveli Lignite Corporation Ltd., Neyveli who had indicated that the "Excise Duty and Sales Tax variations thereon shall not be paid to the Contractor (Appellants) by the Purchaser (NLC)" and that the total contract price would be treated as cum duty price.

(2.) The appellants contention had been that Shri S. Viswanathan in his statement had clearly disclosed all the material facts and about appellants clear understanding and bona fide belief that such an activity did not result in manufacture of goods and hence there was no wilful suppression and that all the facts about the contract had been disclosed to the department even prior to 1993 itself. It had also been submitted that Board itself by their circular in 1986 had stated that such an activity of assembling diesel generator set would not amount to manufacture. The said circular was withdrawn only on 11.10.99. The contract had been entered in 1989 and therefore during that period there was clear understanding in terms of Board's circular that the item was not a part. Therefore, there was no suppression in the matter. Shri S. Viswanathan had clearly described the manner in which the work was carried out to bring into existence the diesel engine and AC generator (alternator) and hence it was brought out as an immovable property. Therefore, the Tribunal in the remand order gave a specific direction to the Commissioner to examine the statement of Shri S. Viswanathan with regard to extending of larger period and as to how the activity amounted to a process of manufacture. A direction was also given to examine appellants contention that activity of manufacture was completed on 10.7.93 itself and the department had full information thereof and therefore the show cause notice issued after five years on 19.1.99 is without jurisdiction and patently not sustainable. The Tribunal expressed its view prima facie that Commissioner had not expressed his view on the time bar and had not given a speaking order and hence he was required to address all the questions and redetermine the case.

(3.) The Commissioner in the impugned order in para -16 has re -examined the issue de novo as per the direction and has stated that he is relying on the paras 13 and 14 of his earlier order -in -original No.19/99 dated 5.8.99 wherein he had held that generator sets are excisable, bought and sold in the market and as such these are liable to duty at the appropriate rate. He held that no further discussion was necessary in this regard.