Per Moheb Ali M. : M/s. Interscape (IS) manufacture furniture, wooden and steel falling under Chapter 44 and 94 of the Schedule to CETA. In response to a tender floated by M/s. Etcetra Design Cell, M/s. IS agreed to undertake to make furniture, Plaster of Paris work and interior painting job for total sum of Rs. 54 lakhs. The scope of work was increased later as the work progressed. M/s. IS executed the job at the site belonging to M/s. Omsagar Engineering Pvt. Ltd. The Officers got wind of the fact that M/s. IS was manufacturing furniture and clearing it without payment of duty. They searched the premises of M/s. Omsagar Engineering Works seized some documents and the furniture made by M/s. IS, searched the premises of M/s. Etcetra Design and seized some documents from there as well and finally searched the premises of M/s. IS and recovered more documents. On the basis of various statements made by all concerned, the documents seized, it was alleged that M/s. IS manufactured furniture for M/s. Omsagar Engineering and cleared it without payment of duty. The said furniture lying in the premises of the later was seized on 2.12.94 and was handed over to M/s. Omsagar under Supratnama and execution of a B11 bond. M/s. Omsagar paid Rs. 24,15,437/- vide TR6 Challan No. NIL dated 3.2.95. The show cause notice as well as the impugned order say that the above sum was paid by M/s. Omsagar towards duty on behalf of M/s. IS.

2. In the impugned order the Commissioner considered various submissions on behalf of M/s. IS and determined the duty liability to be Rs. 16,45,484.57 as against the demand for Rs. 24,15,437/- stated in the show cause notice. He confiscated the furniture but allowed it to be redeemed on payment of a fine of Rs. 1 lakh under Section 34 of Central Excise Act, imposed a penalty of Rs. 10 lakhs on M/s. IS under Rule 173Q of Central Excise Rules imposed a penalty of Rs. 5 lakhs on M/s. Omsagar Engineering Pvt. Ltd. under Rule 209A of Central Excise Rules, interest under Section 11AB and appropriated Rs. 24,15,437/- paid by M/s. Omsagar Engineering Pvt. Ltd. towards all liabilities that arose out of the impugned order. Hence these appeals.

3. Heard both sides.

4. The Tribunal in the case of the same appellant (M/s. IS) in its Order No. A/1251-1276/WZB/2005 dated 19.07.2005 held that the activity carried out at site belonging to another person amounted to manufacture of furniture liable to excise duty. The Tribunal in the case cited supra followed its earlier decision on the same issue. We hold that M/s. IS manufactured excisable goods liable to Central Excise Duty. In this impugned order the Commissioner gave the benefit of Notification No. 48/87 dated 1st March 1987 to all doors, other than flush doors, made by the appellant, deducted the cost of repairs carried out by the manufacturer from the total assessable value and excluded the value of item which came into existence only after they were permanently fixed to the walls, following the ratio of Supreme Court's decision in the case of Sirpur Paper Mills.

5. In the absence of individual prices for various articles manufactured by the appellant, the Commissioner arrived at the assessable value of the impugned goods by adding the estimated cost of raw materials to the labour charges paid, designer fee (pro-rata) and service charge of 15% of the cost of raw material. It was necessary to arrive at the assessable value of individual goods, as they were falling under different tariff heading. We find that the method adopted was fair and reasonable under the facts and circumstances. This aspect has not been pressed by the appellant, M/s. IS. The appellant however, argued before the Commissioner that the assessable value arrived at by the Commissioner as described above should be taken as a cum duty price as it is only after arriving at the value as decided in the case of Sri Chakra Tyres Limited Vs. Collector of Central Excise, Madras reported in 1999 (32) RLT 1 (CEGAT-L.B.)=RLT