SERVESHAM CONSTRUCTION LTD. AND Vs. CCE

JUDGEMENT

(1.) THE above captioned two appeals have been directed against the common Order -in -Original vide which the Adjudicating Authority has confirmed duty demand of Rs. 90,281 with equal amount of penalty and interest, against the company - - appellant No. 1, and also imposed personal penalty of Rs. 2 lakhs on appellant No. 2 - - the Managing Director of the Company. The duty demand alongwith penalty has been confirmed against the company for having manufactured and cleared two mild steel/Carbon steel storage tank without payment of duty. On appellant No. 2 penalty has been imposed under Rule 209 -A being the Managing Director of the Company who facilitated the company in the evasion of the duty on those storage tanks.

(2.) THE learned Counsel has contended that show, cause notice was issued in respect of 12 tanks which were allegedly manufactured and cleared by the appellants without payment of duty, and 10 out of those had been admitted by the adjudicating authority to be not excisable goods. He has also contended that all the tanks were constructed at the fertilizer plant site of Chambal Fertilizer and Chemical Ltd. (CFL) and permanently embedded to earth and as such, no tank irrespective its size, height or diameter could be removed from one place to another and as such, two tanks could not be singled out and treated as excisable goods. He has also contended that benefit of Notification No. 67/95 dated 16.3.95 exempting the capital goods from payment of duty when used in the factory of production has been wrongly denied to the appellants in respect of tanks in question. He has further contended that benefit of the Board Circular dated 15.1.2002 allowing exemption to the goods including the tanks had been wrongly denied to the appellants. He has referred to the Tribunal's Final Order dated 28.10.03 in the case of New Constructions and Ors. in which Chambal Fertilizers Ltd. was also a party and vide which the Tribunal allowed the benefit of the above cited Notification No. 67/95 dated 16.3.95 and set aside the order of the adjudicating authority raising the duty demand in respect of the goods involved therein i.e. pipes, fittings, etc. and also penalty confirmed against them. The impugned order therefore, deserves to be set aside.

(3.) ON the other hand, the SDR has reiterated the correctness of the impugned order. We have heard both the sides and gone through the records. The appellant No. 1 is a Company while appellant No. 2 is its Managing Director. The company was warded sub -contract by Tokyo Engineering Corporation, Japan who got the main contract for expansion of the fertilizer plant of Chambal Fertilizer and Chemicals Ltd; for fabrication, erection of 12 mild steel/carbon steel storage tanks. Out of these 12 tanks, 10 were of bigger size while two of smaller size as detailed in the impugned order itself (para 5 (iv)). All these tanks were fabricated, installed at the site and embedded to the earth permanently by the appellants. The process of fabrication of these tanks at site carried out by them was as under: