2024-VIL-459-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Manufacture – Activity of assembling of office furniture imported in CKD condition - appellant imported parts of chairs, tables, workstations, etc. in CKD condition and also procured indigenously which were assembled at their premises or at the premises of the customers - alleging that the processes undertaken by the appellant resulted into manufacturing of excisable goods viz. ‘furniture’ show-cause notice and demand confirmed invoking extended period with interest and penalty – HELD – activity of assembly of parts and components procured from different sources, some of them are imported and some of them are locally purchased, when assembled into complete furniture’s which are commercially known as distinct products namely tables, chairs, modular work stations, filing racks etc. satisfy the definition of ‘manufacture’ of new products within the meaning of Section 2(f) of the Central Excise Act 1944 – Further, the workstations installed in the premises of the customer from the imported and indigenously procured parts and components could easily be shifted to other premises, hence, these furniture (work stations) are movable, hence excisable goods viz. ‘furniture’ classifiable under CTH 9403 - the impugned orders are modified and the cases are remanded to the adjudicating authority to compute the demands with interest for the normal period of limitation only; also the benefit of cum-duty price and cenvat credit be allowed subject to production of necessary documents – the appeal is partly allowed - Invocation of extended period of limitation – HELD - there is merit in the argument of the appellant that on a bona fide belief that excise duty on assembly of furniture at the site of the customers will not be payable as customs duty has already been paid at the time of its import in CKD condition albeit certain parts used were procured indigenously, excise duty was not discharged on assembly of the same. The judgment of the Hon’ble Supreme Court in Craft Interiors Pvt. Ltd.’s case was delivered in the year 2006 and the present demand is confirmed invoking suppression of facts for the period 2004 to 2006-07. In these circumstances, confirmation of duty invoking extended period of limitation cannot be sustained. Thus, the demand, by issuing show-cause notices from time to time, should be limited to the normal period of limitation - For the said reasons also, no substance in imposing penalty on the appellant and on the Director.
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