By TIOL News Service

CHENNAI, APR 08, 2015: THIS is an appeal by the assessee against the order of Tribunal reported in 2009-TIOL-1070-CESTAT. The appellant (M/s Virgo Industries) had been manufacturing and supplying signages (illuminated signs) under a contract with M/s. Indian Oil Corporation Ltd. (IOC) and had erected them at the retail outlets of OIC located at various placed in the south. As it appeared that Virgo had undertaken manufacture of excisable goods without following central excise formalities, the officers seized signages and parts available at the premises for further action. After gathering evidence in the form of statements of various persons associated with production, inspection and purchase of signages two Show Cause Notices were issued to Virgo proposing to recover central excise duty tentatively found to have been due from Virgo and to penalize them assessee as well as the Managing Director of the assessee. The Commissioner of Central Excise, Pondicherry classified the signages manufactured by Virgo under CSH 9405.90 and demanded duty and imposed penalties. On appeal, the Tribunal upheld the demand, but modified the penalties. Aggrieved by the same, the assessee is before the High Court.

After hearing both sides, the High Court dismissed the appeal by holding that:

The signages , according to the Adjudicating Authority and the Tribunal, fall under CSH 9405.90. The Tribunal placed reliance on the statement of Deputy Chief Inspecting Engineer of RITES the Senior Engineering Manager of IOC according to which it is seen that the signages emerged after complete assembly of all parts at the factory and after inspection of the complete signages , seals are embossed. The Senior Engineering Manager of IOC had stated that all the signages supplied by the appellant were actually manufactured and assembled at the appellant's factory only. The emphatic statement as recorded by the Tribunal is that there was 'no chance of saying' that only parts of signages were taken to IOC outlets and assembled at site. It is also stated that assembled signages were dismantled for convenience of transportation to the respective sites where they were reassembled.

The findings of the Commissioner as well as the Tribunal are that the signages are capable of moving and are installed by fixing it on a concrete foundation and can be detached and shifted to another location without damaging them. Board Circular dated 15.01.2002 relied on by the appellant is also not applicable as the proposition in the Circular was with regard to immovable property. The question of law is answered against the assessee and in favour of the Department.

(See 2015-TIOL-850-HC-MAD-CX)