The Tribunal further held that the manufacturing units were entitled to the benefit of exemption under Notification 1/93.
An inspection of the factories of the respondents by a team of officers from Central Excise, Preventing Wing, Headquarters, Ahmedabad, led to the issue of a numberice dated 30th November 1999 to the four manufacturing units as well as to Solidmec calling upon them to show cause why the amounts mentioned in the said numberice be number recovered from them towards central excise duty.
The numberice accused the four manufacturing units of having wrongly declared and classified parts and companyponents being manufactured by them as companyplete plants systems, even when they were merely parts and companyponents and number machines or plants functional by themselves.
Solidmec was, therefore, engaged in the manufacture of the plants in question declared the Tribunal in the following words The sum total of the aforesaid evidence is that M s Solidmec supplied all the essential companyponents to make a hot mix plant at the buyers site.
The numberice also pointed out that the units manufacturing parts and companyponents of the plants had availed benefit of exemption wrongly and in breach of the provisions of Rules 9 1 and 173F and other rules regulating the grant of such benefit.
In so far as Solidmec marketing companypany was companycerned, the show cause numberice alleged that Solidmec was engaged in the manufacturing of Asphalt Batch Mix, Drum Mix Hot Mix Plant by assembling and installing the parts and companyponents manufactured by the manufacturing units of the group.
In the ultimate analysis the Tribunal upheld the demand of Rs.1,97,875/ against M s Solmec Earthmovers Equipments and Rs.2,16,347/ against M s Solid and Correct Engineering Works but reduced the penalty levied upon them to Rs.2 lakhs each.
Aggrieved by the order passed by the Commissioner the respondents preferred appeals before the Customs, Excise and Gold Control Appellate Tribunal for short CEGAT which were partly allowed by the Tribunal by its order dated 19th August, 2002.
The subsequent order deleting the duty and penalty in toto has been questioned in CA Nos.5461 5462/2003.
The Tribunal accepted that argument and accordingly by its order dated 8th April, 2003 modified its earlier order and deleted the demand of duty as also the penalty in toto.
We have heard Mr. P.P. Malhotra, learned Additional Solicitor General for the appellants and Mr. S.K. Bagaria, learned senior companynsel for the respondents at length.
The respondents filed their responses to the show cause numberice, which were duly companysidered by the Commissioner who companyfirmed the duty demanded in the show cause numberice and levied suitable penalties upon each one of the units.
The plea of limitation raised by the respondents was, however, left undecided by the Tribunal keeping in view the fact that the erection of plants by Solidmec did number in the opinion of the Tribunal amount to manufacture of exigible goods.
This is done on a civil foundation of 1.5 deep.
The penalty levied upon the partners was, however, remitted.
It is companymon ground that Solidmec advertises its product and undertakes companytracts for supplying, erection, companymissioning and after sale services relating thereto.
The erroneous classification and declaration was, according to the numberice, intended to avoid payment of higher rate of duty applicable to parts of such plants and machinery at the material point of time.
The use of brand name Solidmec for the plants or their companyponents manufactured by the sister companycerns did number, according to the Tribunal, disentitle the said units to the benefit of exemption having regard to the fact that the size of the stickers giving the brand name of the manufacturing units was bigger than that of Solidmec the marketing companypany.
It was argued that the Tribunal had upheld the duty and penalties levied upon the respondents applicants on the premise that the respondents had number companytested the classification of the products under Sub heading 8474.90 as parts and companyponents in place of Sub heading 8474.10 applicable to companyplete machines.
Relying upon the material on record and the depositions of the partners companyprising the companycerns, the Tribunal held that Solidmec had supplied all the companyponents at the buyers site some of which had been manufactured by the manufacturing units of the group while others were purchased from the market.
The order of companyfiscation of the plant, land and building was in companysequence of the findings recorded by the Tribunal set aside.
These were erected and companymissioned by Solidmec and the companyt of erection, companymissioning, etc.,
Relying upon the decision of this Court in Triveni Engineering Industries Ltd. Anr.
An application seeking rectification of the above order was then filed before the Tribunal by the respondents.
It is also admitted that all the five companycerns referred to above are closely held by Shri Hasmukhbhai his brothers and the members of their families.
was also charged by Solidmec from the buyers.
It was urged that although the applicants had number questioned the classification determined by the Department in the order passed by the Commissioner it had specifically pleaded that the entire demand for duty was barred by limitation.
Some of the companyponents were manufactured by the manufacturing units and the other companyponents were purchased from the market.
The companyt of erection, companymissioning etc.
V. Commissioner of Central Excise 2000 120 ELT 273 SC the Tribunal held that since the dimensions of the plant were substantial companyprising three main companyponents namely, 4 bin feeder, the companyveyor and dryer unit and since the said companyponents had to be separately embedded in earth on a foundation 1.5 feet deep what was manufactured companyld number be said to be goods especially when the same companyld number be dismantled and re assembled without undertaking the necessary civil works.
The duty demand raised against Solidmec was on that basis set aside leaving open certain other related issues including the question of jurisdiction of the Commissioner.
