JUDGMENT - B.N. SRIKRISHNA, J.:---These two writ petitions, under Article 226 of the Constitution of India, impugn the adjudication orders made against the petitioners under section 33 of the Central Excise Salt Act, 1944 (hereinafter referred to as 'the Act'). The facts in both the writ petitions are to a large extent similar, though differing on marginal aspects. The issues of law thrown up by both the writ petitions are identical. Hence, it would be convenient to dispose of both the writ petitions by a common judgment and order.

2.FACTS

(A)Writ Petition No. 2420 of 1987

(a)The petitioner is a Public Limited Company registered under the provisions of the Companies Act, 1956 with its registered office at Nagpur. The petitioner is in the process of setting up an integrated steel plant to manufacture mild and alloy steel rolled products at Ekalati/Warthi Village of Bhandra District. The project was contemplated in two phases. The first phase comprises installation of sophisticated high technology electrical arc furnace with ladle refining facility, continuous caster and continuous rolling mill. The second phase comprises making of sponge iron, which is the main raw material used in the Steel Industry. The petitioner has entered into technical collaboration with the famous West German Company M/s. Krupps Industrietechnik. In order to construct a facility for carrying out its production activities, the petitioner awarded a site development and factory construction contract to M/s. Bridge Roof Company, a Public Sector Undertaking. M/s. Bridge Roof Company has undertaken the work of fabrication and erection of the complete shed of the factory including roofing and cladding. The contract between the parties requires the petitioner to provide duty paid iron and steel items like angles, channels, plates, joists, beams, etc. M/s. Bridge Roof Company fabricated certain material out of such duty paid angles, channels, plates, joists, beams, etc. supplied to them and the fabrication is done on the site where the construction of the shed is proposed. These fabricated items are embedded in the construction forming the columns and roofs of the factory shed.

(b)The petitioner and M/s. Bridge Roof Co., were served with show cause notices on 10-2-1987 by the respondents. It was alleged therein that M/s. Bridge Roof Company were engaged in the work of fabrication of columns, trusses and other steel structures falling under sub-heading 7308.90 of Central Excise Tariff, 1985; that M/s. Bridge Roof Company as well as the petitioner were carrying out the activity of manufacturing excisable goods on the petitioner's premises; that the applicable rules under the Act had not been complied with and the amount of duty had not been paid. The notice, therefore, called upon both the petitioner and M/s. Bridge Roof Company to show cause as to why penalty should not be imposed upon them under Rule 173-Q of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules') and to show cause as to why excise duty amounting to Rs. 1,56,163.05 leviable on the excisable goods already removed without payment of duty should not be recovered from them under Rule 9(2) of the Rules. It also called upon them to show cause as to why the goods valued at Rs. 2,67,232.40, which had been seized and released provisionally, should not be confiscated under Rule 173-Q of the Rules.

(c)M/s. Bridge Roof Company gave a detailed reply dated 14-3-1987 to the show cause notice served on them. Shortly put, the contention was that the fabrication work done by them consisted of carrying out certain operations like drilling, cutting, welding, rivetting on the duty paid columns, angles, plates, etc. supplied by the petitioner and such activity did not amount to 'manufacture', nor did it result in the production of any 'goods' on which excise duty could be levied. It was contended that columns, trusses and roof girders are merely structural shapes and assuming them for th

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