Per P. Karthikeyan - On 23.1.2000, following intelligence, officers of the Department visited the premises of M/s. Virgo Industries (Engineers) Pvt. Ltd. (hereafter, Virgo) and examined the records. It was observed that Virgo 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 IOC located at various places 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, Shri Mathew Kuncheria. Adjudicating the Show Cause Notices issued following due process of law, the Commissioner of Central Excise, Pondicherry classified the signages manufactured by Virgo under CSH 9405.90 and demanded a total amount of Rs.99,05,053/- towards duty on the signages manufactured and cleared during the period 1999 - 2000 to 2002 - 2003 along with applicable interest. He confiscated excisable goods of value of Rs.3,29,925/- under Rule 173Q(2) of Central Excise Rules, 1944 (CER) / Rule 25 of Central Excise Rules, 2002 and offered an option to redeem the same on payment of a fine of Rs. 1 lakh. He imposed a penalty of Rs.99,05,053/- on Virgo under Section 11AC of the Central Excise Act, 1944 (the Act) and another penalty of Rs. 7 lakhs under Rule 173Q of CER. A penalty of Rs. 10 lakhs was imposed on Shri Mathew Kuncheria, under Rule 209A of CER/Rule 26 of CER, 2002.

2. In the appeal filed by Virgo the main ground raised is that Virgo fabricated only the sign poles of iron and steel required for the signages. Other items such as fibre glass reinforced plastic sheets, the vinyl sheets cut into signs, the electrical panels concealed within the signboard etc. had been got manufactured by third parties and that the signages proper had been erected at the various IOC bunks. At the premises of Virgo only the sign poles were fabricated and the signages were erected using the components received at the various sites from their manufacturers. Signage came into existence only at site and the same was immovable on erection as it was fixed to earth on concrete foundation. No excise duty was payable by Virgo on the activity of fabrication and erection of signages at the IOC premises. In the appeal filed by Shri Mathew Kuncheria the penalty imposed on him is sought to be vacated on the ground that no penalty could be imposed under the said rule unless guilty knowledge on the part of the person was found and that there was no such finding in the impugned order against him. During hearing the learned counsel for the appellants submitted that in the light of the Board's Circular No. 58/1/02-CX dated 15.1.2002 [reported in 2002 (48) RLT M63] no duty was payable on signages even if the same were cleared from the factory in CKD or unassembled form as the final product was immovable and not goods. He also relied on the following judicial authorities:

(i) Goldstone Engineering Ltd. Vs. Union of India - 2005 (181) ELT 11 (AP)

(ii) Commissioner of Central Excise, Chennai Vs. India Pistons Ltd. - 1998 (29) RLT 494 (CEGAT)=1998 (104) ELT 494 (Tribunal)

(iii) Collector of Central Excise, Bhubaneswar Vs. Radiant Electronics Ltd. - 1995 (7) RLT 44 (CEGAT)=1996 (85) ELT 102 (Tribunal)

(iv) Triveni Engineering & Indus. Ltd. Vs. Commissioner of Central Excise - 2000 (40) RLT 1 (SC)=2000 (120) ELT 273 (SC)

(v) Hyderabad Race Club, Malakpet, Hyderabad Vs. Collector of Central Excise - 1986 (23) ELT 274 (Tribunal)

3. We have also heard the learned SDR who reiterates the reasoning