pre-fabrication of goods-liable to ser.tax or excise duty ?

Dear Sir,

A proprietory firm gets order from a ltd. co. to 'prefabricate,sell and hand over Manhole/Handhole as per specifications & drawings given by ltd.co.
i)Raw materials like cement,steel etc are 100% to be purchased by proprietory firm(i.e.processor ).

ii)Proprietory firm gets this work done through contract labourers.

iii)Finished goods to be delivered at site of ltd.co.

iv)sales price is fixed by ltd.co which is inclusive of material cost+ fabrication cost + transportation cost)excluding service tax.

v)Activity of fabrication is done only on such orders.It is not a regular business.If order gets cancelled then 'Manhole/Handhole may or may not be saleable in open market.

Query:1)Whether above activity of proprietoy firm is subjected to ser.tax or excise duty ?

ii)sales price is inclusive of transportation.Who is liable to ser.tax ?
Thanking you,
sunil mehta