1. This is a revision petition Under Section 36 of the Central Excises & Salt Act, 1944 which has been transferred to the Tribunal for disposal under the provisions of Sections 35P(2) of that Act as amended.
2. The facts of the case are that this company has a factory where they design and fabricate materials required for building construction such as false ceilings, windows, doors, partitions etc. They accept work-contracts to provide at the construction sites false ceilings, windows, doors, partitions etc. and the main materials they require at their factory for fabrication are aluminium extruded sections arid glass sheets. They purchase these from the market after Central Excise duty has been paid by the manufacturers and at their factory perform the jobs of cutting the sections to required length, punching or drilling, holes, tapping, rivetting, screwing etc., during which, it is claimed, that the shape and identity of the materials is neither changed nor lost. The processed materials are taken to the site where construction work is taken and they are not marketable nor capable of being used, except at the work site, as there still remains some work to be done on them. The balance work and fixing is done at the site.
All other items to complete the job, such as, glass sheets, ceiling boards, partitions etc. are bought from the market as required at the site. Each individual order has to be executed as a works contract.
3. With the introduction of item 68 by the Finance Bill introduced on 1st March, 1975, the Central Excise Officers began to insist upon the appellants taking out a licence Under Section 6, which they did, under compulsion, on 12.3.75 and started paying duty under protest. The total amount paid upto 31st March, 1980, amounts to Rs. 7,88, 156.57. Towards the end of July, 1976, they received a show-cause notice dated 11.6.76/24th July, 1976 issued by the Supdt. of Central Excise, for having cleared goods from the factory without getting the price-list approved or exercising the option of clearance on invoice price as per notification No. 120/75 dated 30.4.1975. The Assistant Collector granted them a personal hearing and then held that they had committed a breach of ruling 173B punishable under Rule 173B, as it was obligatory either to file a price-list or opt for assessment according to the said notification. He cautioned the licensee to be more careful as the item was a new levy and the licensee had paid duty on the product.
4. The appeal against this order was decided by the Collector of Central Excise (Appeals). In the impugned order the relevant portion of which is reproduced : Regarding the contention of the appellants that these doors, windows, and partitions get assembled only at site, it must be stated that the Factories Act, 1948, covers factories on site, if Jthey satisfy the condition regarding the number of workers employed and if a manufacturing activity is carried on in such premises.
Assembling of different parts amounts to manufacture, because by assembling, a new and different product comes into existence (Vijaya Cycle and Rickshaw Co. v. Commissioner of Sales Tax 1971 27 STC. If the appellants have not taken out a Central Excise Licence for their assembling operations at site, they are advised to do so. If such premises are not included in their licence, they would be contravening the piovisions of the Central Excise Rules, 1944. The appeal is not tenable and is accordingly rejected.
5. The present appeal is against this order which is challenged as wholly misconceived. The appellants contend that they had not manufactured any goods as envisaged in Section 3 of the Central Excises & Salt Act, and Rules do not pertain to the activities pursued by them.
The collection of Central Excise duty since March, 1, 1975, was forciable and without the authority of law and violates their constitutional rights. They prayed for stay order directing the Collector and his subordinates to refrain from collecting the duty on their providing a bank guarantee to ensure the safely of Government revenue. In the alternative, they desired an early hearing.
6. The case came up for hearing on 25th March, 1983. The Advocate for the appellants stated that the appellants are engaged only in job work and do not manufacture any goods in their factory They purchase all their duty paid materials from the market like aluminium sections etc.
which they cut to the specifications required by their customers and punch holes in the strips before fixing them in the building, as doors and windows, in accordance with the job contracts undertaken by them.
He referred to Bombay High Court Judgment 1980, ELT 280. Bombay, according to which the High Court has ruled that walk-in coolers fitted at the site are not excisable under the Tariff item 29-A of the Central Excise Tariff. He further clarified that the appellants do not fully assemble the frames or windows nor do they sell any of these in the market. The total sales if any, of such complete window frames would not exceed 1 per cent of their total turnover. The Advocate further referred to the Judgment of the Sales Tax Appellate Tribunal, Madras vide Tribunals appeal No. 1229, 1220, 1221/80 dated 1st April, 1981.
The Sales Tax Appellate Tribunal while disposing of the appeals in respect of the Appellant's factory at Madras held that the turnover of the appellant's factory at Madras is entirely part of their works contract and cannot be included in their sales turnover. Shree Raghavan on behalf of the Department referred to the invoices of the appellants and stated that job work undertaken by the appellants includes supply of complete windows, doors, etc. and their installation are supplied by the appellants on job work basis and, therefore, these are excisable.
7. The Bench has carefully considered the points made in the appeal and by the respondents. From the facts of the case, as presented in the order of the Assistant Collector, it is not clear as to the extent of the manufacturing activities which take place in the factory of the appellants. In other words, whether they prepare window frames and windows, etc. in ready to use condition or they assemble them on the site of their customers after cutting the strips to the required specifications and punching holes therein in their factory, for the purpose of assembling on the site. In the latter case, the goods can hardly be considered as manufactured at the appellants' factory since they are not marketable as such. The Departmental Representative, Shree Raghavan, was also not able to throw sufficient light on these facts.
The Bench, therefore, decided to set aside the order-in-appeal passed by the 'Appellate Collector and remand the case to the Collector (Appeals), to decide the case, after ascertaining in detail the extent of activities carried on in the 'appellants' factory and condition in which the goods are cleared from the factory. The Appellate Collector should ascertain the facts of the case after giving a personal hearing to the appellants and considering the evidence, if any, produced by them, within 90 days of the order.