2005 (98) ECC 654 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Commissioner of Central Excise, Chennai

Versus

Architecture Incorporated

Appeal No. E/652/2002

[Arising out of Order-in-Original No. 24/2001, dated 18.10.2001 passed by Commissioner of Central Excise, Chennai]

Final Order No. 1004/2004, dt. 17.11.2004, Certified on 2.12.2004

Excisability

Aluminium door/window frames -- When something comes into existence not as a distinct marketable commodity but as an integral part of immovable property, it is not excisable aluminium door/window frames obviously belong to this category.

Appeal rejected

PRESENT :

Smt. R. Bhagya Devi, SDR for the appellant.

Shri P.C. Anand, C.A. for the respondent.

Cases Cited :

1. CCE v. Kone Elevators India Ltd., 2001 (138) ELT 635 (Tri.Chen.)..................... [Para 3]

2. Collector of Central Excise, Thane & Madras v. Ajit India Pvt. Ltd., 2000 (119) ELT 274 (SC) [Para 1]

3. Otis Elevators India Co. Ltd., 1981 (8) ELT 729 (GOI)....................................... [Para 3]

Per : P.G. Chacko (Oral)

This appeal of the Revenue is against an order of the Commissioner of Central Excise passed in adjudication of four show-cause notices. Two of these notices had demanded duty on powder-coated Aluminium sections cleared by the respondents to customers' building construction sites and the other two notices had raised demands of duty on aluminium door/window frames erected at such sites. Ld. Commissioner dropped the proposal to demand duty on both the items, in the impugned order. His order was reviewed by the Board holding that the process of converting aluminium sections considered to be the primary raw material into a form which could be used as members of aluminum door/window frames amounted to "manufacture" and that the items so processed were marketable "goods" classifiable Heading No. 76.10 of the CETA Schedule. The Board, in its review order, summarised the findings of the Commissioner in para 2.8 thereof, wherein a reference was also made to the Commissioner's reliance on the Supreme Court's decision in Collector of Central Excise, Thane & Madras v. Ajit India Pvt. Ltd., 2000 (119) ELT 274 (SC). The Board's findings constitute the grounds of this appeal, which have been reiterated by Ld. SDR. Ld. SDR has also referred to the Board's Order No. 58/1/2002-CX dated 15.1.2002 under Section 37B of the Central Excise Act.

2. Ld. Chartered Accountant for the respondents submits that, insofar as the Aluminium sections are concerned, excisability was settled by the Apex Court in the case of Ajit India Pvt. Ltd. (Supra). As regards the frames of doors and windows, it is submitted that, even according to the process noted by the adjudicating authority, these frames were assembled, in situ, of the powder-coated sections of aluminium at customer's building site and are not marketable.

3. After examining the submissions, we find that Ld. Commissioner has eminently relied on the Supreme Court's ruling in the case of Ajit India Pvt. Ltd. (Supra) to hold that the powder-coated sections of aluminium which were cleared by the respondents to their customer's building site for in situ assembly of door/window frames are not excisable. Curiously, though the decision of the Apex Court was noted by the reviewing authority, it was not sought to be distinguished, nor was nay better judicial authority cited by the Board. The appellant also has not cited any binding case law to the contra. The question whether the sections of aluminium are excisable should be held to have already been settled by the Apex Court against the Revenue. As regards the door/window frames of aluminium, we may usefully extract below the process noted by the Commissioner himself:

"Powder-coated, partially drilled aluminium hollow sections (Rectangular tube like structures) are received from the factory at the site. After taking the measurements of the masonry area where the door is to be fixed, these powder coated hollow sections are cut to required sizes and placed in the door way area to see their fitment. On the top vertical member, two L shaped angle cleats are fitted (vide figure-1 in the annexure), the two vertical members are inserted into the horizontal member and placed in the door way area to see the correctness of the measurements to fix the frame. Then all the three members are placed together (as in figure-2 of the annexure), in the door way to mark the points to drill holes in the wall through the members. Then the walls are drilled in the marked places and small wooden wedges are driven into the holes drilled. The three members shown in figure-1 are placed in the masonry and then fixed to the wall with screws. Next on the floor a matching pivot holder plate is fixed on the floor."

It is evident from the above account of the process that the door/window frames were built up in situ during the course of construction of building and they came into existence not as identifiable and marketable goods but as part of an immovable structure. In this connection, the reliance placed by Ld. Chartered Accountant on certain provisions of the Board's Section 37B order dated 15.1.2002 is apposite. Clause (i) of para 4 and Clause (iv) of para 5, which are relevant, are extracted below:

"4. The plethora of such judgments appear to have created some confusion with the assessing officers. The matter has been examined by the Board in consultation with the solicitor General of India and the matter is clarified as under:

(i) For goods manufactured at site to be dutiable they should have a new identity, character and use, distinct from the inputs/components that have gone into its production. Further, such resultant goods should be specified in the Central Excise Tariff as excisable goods besides being marketable i.e., they can be taken to the market and sold (even if they are not actually sold). The goods should not be immovable."

5. (iv) Lifts and Escalators. (a) Though lifts and excalators are specifically mentioned in sub-heading 8428.10, those which are installed in buildings and permanently fitted into the civil structure, cannot be considered to be excisable goods. Such lifts and escalators have also been held to be non-excisable by the Government of India in the case of Otis Elevators India Co. Ltd., 1981 (8) ELT 729 (GOI). Further, this aspect was also a subject matter of C & AG's Audit Para No. 7.1(b)/98-99 (DAP No. 186) which has since been settled by the C & AG accepting the Board's view that such lifts and escalators are not excisable goods. Also refer CCE v. Kone Elevators India Ltd., 2001 (138) ELT 635 (Tri.Chen.) : 2001 (45) RLT 676 (CEGAT-Chen.)."

The rationale behind the above guidelines issued by the Board is obvious. When something comes into existence not as a distinct marketable commodity but as an integral part of an immovable property, it is not excisable. The aluminium door/window frames in the instant case, obviously, belong to this category.

4. In the result, the order of the Commissioner is upheld in toto and this appeal is rejected.

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