2005 (98) ECC 372 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(B)

Shri C.N.B. Nair, Member (T) and Shri P.S. Bajaj, Member (J)

AGV Alfab Limited & V.K. Sharma, Director

Versus

CCE, Delhi-II

Appeals No. E/514-515/2004-NB(B)

[Arising out of Order-in-Original No. 10/2003 dated 31.10.2003 passed by the C.C.E., Delhi-II]

Final Order 869/870/2004-B, dt. 2.11.2004, Certified on 10.11.2004

Demand (C. Excise)

Civil Contractor -- Manufacturing curtain walls -- Is constructed on existing buildings -- It is erected piecemeal on site -- Items do not come into existence as identifiable commercial products in a factory or other manufacturing premises -- Duty demand unsustainable.

Appeal allowed

PRESENT :

Shri A.K. Jain and Shri Rajesh Jain, Advs. for the appellants.

Smt. Charul Baranwal, SDR for the respondent.

Cases Cited :

1. CCE, Nagpur v. Wainganga Sahkari S. Karkhana Ltd., 2002 (82) ECC 457 (SC) [Paras 3, 5]

2. Suvidha Engineers (India) Ltd. v. CCE, Delhi, 2004 (96) ECC 189 (Tri).......... [Paras 3, 5]

Per : C.N.B. Nair

These appeals are directed against the duty demand of Rs. 48 lakhs and imposition of penalties, upon a finding that there was manufacture of "doors, windows, frames of curtain walls, alucobond panels and structural glazing etc." by M/s AGV Alfab Ltd.

2. The submission of the appellant is that they are a construction contractor and they carry out construction of aluminium doors, windows, curtain walls etc. at various sites. The work is carried out against contract on various buildings, hotels, offices etc. According to the appeal and affidavit of Shri V.K. Sharma, Managing Director of M/s AGV Alfab Limited, the appellant purchased aluminium sections and after getting them anodized from outside, cut them to the required lengths for frames for curtain walls windows etc. These are erected at site on buildings. The aluminum frames are, as per specification of customers, constructed on location. The method of construction as explained is that walls of buildings are first mapped and marked for fixing clamps. Thereafter, walls are drilled at regular intervals and clamps are fixed with the help of fasteners. On the clamps, vertical aluminum sections are placed which are tightened to the clamps with bolts. Thereafter, across the vertical sections/columns, horizontal aluminium sections are fixed with the help of clamps/cleats. On the aluminium sections, double sided tapes are put to facilitate fixing of glass and thereafter, toughened customized glasses are fixed on the tapes. The empty space between the glass and the aluminium sections is filled with structural silicon to permanently join the glass with the aluminium sections. The learned Counsel for the appellant has pointed out that such civil constructions at site cannot be a manufacture of goods. It is being pointed out that the marketability is an essential character of goods and the constructions as site as explained are not marketable. Learned Counsel has pointed out that even in the statement date 9.6.2000, Shri V.K. Sharma, Director of the appellant's firm had explained the aspect of construction at site [para 3 of the Show-cause Notice].

3. Learned Counsel has submitted that it is well settled CCE, Nagpur v. Wainganga Sahkari S. Karkhana Ltd., 2002 (82) ECC 457 (SC) : 2002 (50) RLT 125 (SC) and Suvidha Engineers (India) Ltd. v. CCE, Delhi, 2004 (96) ECC 189 (Tri) that constructions at site do not involve manufacture of goods attracting central excise duty.

4. We have perused the records and heard the learned SDR also. Duty demand has been confirmed in the present case on a finding that the appellant had manufactured "aluminium doors, windows, frames of curtain walls, alucobond panels and structural glazing etc." The consistent position of the appellant all through the proceedings was that the items in question are constructed on buildings and that they are part of fixed immovable property. The allegation raised in the Show-cause Notice was that M/s. A.G.V. Alfab Ltd. manufactured and cleared doors and windows, frames of curtain walls etc. Para 13 of the Notice stated the following in respect of processes undertaken by the appellant:

"From the foregoing it appears that the party is procuring raw material (mainly Aluminium Section) from various suppliers and after subjecting them to various processes like anodizing, cutting, routing etc. was fixing these resultant finished products i.e. curtain wall, aluminium doors and windows etc. at their various sites. The process undertaken to bring the raw aluminium section to the shape required for affixing them to the wall in the shape of curtain walls, doors, windows etc. brings to fore a distinctively new finished product quite different from the raw aluminium section procured by the party before subjecting the same to various processes like cutting, anodizing, routing etc....."

In their reply, the appellant contractor stated that they were basically into manufacture of curtain walls and that this involves "making of aluminium frames as per the design/specification of customers which is raised from the ground level and attached to the walls with the help of horizontal and vertical members of aluminium frame/curtain wall generally starts from two feet to four feet above ground level. After a frame is erected, glass is fitted into it and the frame is closed with the help of aluminium section and that likewise curtain walls is raised from the ground level to upper levels in interlocking manner" [(c) & (d) in para 5]. The appellant also stressed that once the curtain wall is erected it cannot be dismantled. It was also stated that the frame cannot be first made as such for complete dimensions and then fitted to building. The frames are attached to the building in piecemeal and further pieces are added to take it to upper level .......... never during the course of the whole activity, the curtain wall is first made as such and then attached to building. This is practically impossible. Once the structure is attached to building, the structure and the curtain wall so raised also get immovable property. Anything attached to building permanently is also an immovable property. The sheer dimensions of the curtain wall makes it impracticable to be removed or taken away [para 8 of the Reply]. The impugned order has also noted that contracts are for curtain wall and laminated doors, rooms, windows, ventilators and partitions and the contract is awarded for aluminium works, aluminium glazing, structural glazing etc. All the same, it has been held that the appellant is manufacturing doors, windows, frames for curtain walls, alcobond panels, structural glazing etc. and confirmed duty demand.

5. It appears from the materials on record that the appellant is not a manufacturer as such of doors, windows or any such identified items. It is a civil contractor manufacturing curtain walls. The curtain wall is constructed on existing buildings. It is erected piecemeal on site. It is too big to be first manufactured in a factory and to be lifted and installed. And once constructed, it cannot be removed are re-fitted as such. The appellants first prepares aluminium sections by cutting aluminium angles, plates etc. to size, drilling holes etc. in their own premises or at construction site. That activity does not bring into existence any commercial products. Windows, doors etc. come into existence only upon installation alongwith other members. These are constructed piecemeal. Items do not come into existence as identifiable commercial products in a factory or other manufacturing premises. The appellant's contention that construction at site does not involve manufacture of excisable goods is covered by judgment of the Apex Court in the case of C.C.E., Nagpur v. Wainganga Sahkari S. Karkhana Ltd. and the decision of the Tribunal in the case of Suvidha Engineers (India) Ltd. v. C.C.E., Delhi. The duty demand in the present case is not sustainable. In the absence of duty demand, penalties are also not justified.

6. In view of what has been stated above, the appeals are allowed with consequential relief, if any, to the appellant, after setting aside the impugned order.

………………….