Case Law Details
Sri Saraswathi Propeller Works Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Introduction: In a landmark case at the CESTAT Chennai, Sri Saraswathi Propeller Works went head to head with the Commissioner of GST & Central Excise. The core contention was whether steel structures that are part of permanent civil construction and not designed as goods are exempt from excise duty.
Analysis: The case sprang from a situation where Sri Saraswathi Propeller Works allegedly evaded central excise duty on manufactured/fabricated goods. Upon investigation, it was discovered that the clearances exceeded the exemption limit set for SSI units, leading to charges of evasion.
The defense put forward by Sri Saraswathi Propeller Works had two primary prongs. First, they cited non-receipt of vital documents essential to their defense. Second, on the merit of the case, they argued that the fabricated items they created, primarily being embedded into the earth at customer sites, should not be classified as ‘excisable goods’. Therefore, no duty should be levied on them.
Key to the appellant’s argument is the CBEC circular dated 15.01.2002, which clearly states that items embedded into the earth and forming part of permanent civil construction are not liable for excise duty.
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