LexCOMMISSIONER OF CENTRAL EXCISE, INDORE versus M/S. VIRDI BROTHERS AND ORS.
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A COMMISSIONER OF CENTRAL EXCISE, INDORE v. MIS. VIRDI BROTHERS AND ORS. DECEMBER 12, 2006 B (DR. ARIJIT PASA Y AT AND S.H. KAPADIA, JJ.] Central Excises Act, I 944: Section 3-Plant and machinery assembled at site-Whether excisable C goods-Held: These plants are basically systems comprising of various components and are not machines as a whole-Accordingly such systems as a whole are not excisable goods-Circular No. 581112002-CX dated 15th January, 2002. The question for consideration in these appeals is whether Tribunal was D correct in holding that refrigeration plant/cold storage plant/central air- conditioning plant/caustic soda plant assembled at site are not excisable goods. Dismissing the appeals, the Court HELD: In view of the Circular No.58/1/2002-CX: dated 15th January, E 2002, the view of CEGA T was correct that these plants are basically systems comprising of various components and are thus in the nature ofsystems and are not machines as a whole. Accordingly such systems as a whole cannot be considered to be excisable goods. (834-G; 831-E) p Quality Steel Tubes Pvt. Ltd v. CCE, (1995) 75 E.L.T. 17 (SC); Mittal Engineering Works Pvt. Ltd v. CCE, Meerut (1996) 88 E.L.T. 622 (SC); Sirpur Paper Mills Ltd v. CCE, Hyderabad (1998) 97 E.L.T. 3 (SC); Silica Metallurgical Ltd v. CCE. Cochin (1999) 196 E.L.T. 439 (Tribunal); Duncan Industries Ltd. v. CCE, Mumbai, (2000) 88 ECR 19 (SC); Triveni Engineering & Industries Ltd. v. CCE, (2000) 120 E.L.T. 273 (SC) and CCE, Jaipur v. G Man Structurals Ltd, (2001) 130 E.L.T. 401 (SC), referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 203-214 of2002. From the Common Final Order No. 199-21112001-A dated 18.5.200 l of the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (Bench-A) H 830 COMMNR. OF CENTRAL EXCISE, INDORE v. VIRDJBROTHERS [PASA YAT,J.] 83 l in Appeal No. E/410/2001-A, E/444/2001 and E/447-456/2001-A. A WITH C.A. Nos. 1374-1376, 5863 and 8337-8344/2002. R.G. Padia, Navin Prakash, Ajay Shanna, Vikram Gulati and B. Krishna B Prasad for the Appellants. S.K. Sanghi, Alok Yadav, M.P. Devanath, Rajesh Kumar, V. Balachandran, Shobha and H.K. Puri for the Respondents. The Judgment of the Court was delivered b)I c DR. ARIJIT PASAYA T, J. In each of these appeals challenge is to the common final order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (in short 'CEGAT'). The basic question in all these appeals is whether refrigeration plant/cold storage plant/Central air-conditioning plant/caustic soda plant can be subjected to duty under Central Excise Act, D 1944 (in short the 'Act'). ·Stand of the appellant was that the fabrication of such plants out of duty paid bought out amounts to manufacture of a new marketable commodity and therefore, excise duty is payable. The CEGA T held that no excise duty is leviable and thus these plants are not subject to excisability. It accepted stand of the respondents that these E plants are basically systems comprising of various components and are thus in the nature of systems and are not machines as a whole. Accordingly, such systems as a whole cannot be considered to be excisable goods. According to learned counsel for the appellant, the view taken by the CEGA T is untenable. The adjudicating authority was justified in holding that F fabrication of the plants in question out of duty paid bought out items amounts to manufacture of a new marketable commodity and therefore dutiable. The issue relating to excisability of plants and machinery assembled at site has been determined by this Court in several cases. For example Quality G Steel Tubes Pvt. Ltd. v. CCE, (1995) 75 E.L.T. 17 SC; Mittal Engineering Works Pvt. Ltd v CCE, Meerut (1996) 88 E.L.T. 622 (SC); Sirpur Paper Mills Ltd. v. CCE, Hyderabad, (1998) 97 E.L.T. 3 (SC); Silica Metallurgical Ltd. v. CCE, Cochin (1999) 106 E.L.T. 439 (Tribunal); Duncan Industries Ltd v. CCE, Mumbai (2000) 88 ECR 19 (SC); Triveni Engineering & Industries Ltd. v. CCE, (2000) 120 E.L.T. 273 (SC) and CCE, Jaipur v. A-fan Structurals Ltd., H 832 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R. A (2001) 130 E.L.T. 401 (S.C.) As a matter of fact taking into account these decisions Circular No.58/ 1/2002-CX dated 15th January, 2002 has been issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise & Customs, New Delhi. The Circular indicate
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