P.C. Jain, Member (T)

1. The appellants M/s. Tata Robins Fraser Ltd. manufacture machinery items falling under Tariff Item 68 in their factory at Jamshedpur. They undertake construction of projects on contract basis. These contracts include civil and structural work, supply of machinery and equipment, their erection and installation etc. Machinery and equipment required for the execution of their works are partly manufactured in their own factory at Jamshedpur and partly procured in the market. They also get certain items manufactured in other factories as per specifications raw material supplied by them.

2. The appellants had undertaken 52 contract works between 1-3-1975 to 31-12-1981 of the total value of Rs. 17,43,00,149/-. For the execution of these contracts they had cleared machinery items from their factory at Jamshedpur on payment of duty. Total amount of duty paid on those items was Rs. 33,44,00,880/-. It was alleged in a show cause notice dated 16-1-1982 against the appellants as follows:-

"M/s. TRF Ltd., Jamshedpur knew that as per standing orders and instructions, the goods falling under T.I. 68 which are cleared in knocked down condition to be assembled at site and over a period of time against a particular contract, clearances are assessable to duty on the value of the articles in completely assembled condition.

. . .

Thus it is evident that M/s. TRF have not discharged their duty liability fully on the goods of T.I. 68 manufactured by them in completely assembled condition and in this way it appears that they have evaded payment of duty approximately of Rs. 1,05,94,116/-. The actual amount of duty evaded is, however, under investigation which will be intimated to them at the time of adjudication."

2.1. In their reply to the show cause notice the appellants contended that they had two types of activities, one as a manufacturer and the other as a specialised construction contractor. As a manufacturer they manufacture machinery and equipment such as idlers, pulleys, crushers, screens, feeders, wagons tipplers, stacker reclaimers, fabricated take-up frames etc. Their products are both for outright sale and for clearance on their own account for the execution of various contract works. The items manufactured by them are always cleared on payment of duty. Even if some bulky items are required to be cleared in pieces for the sake of convenience and economy in transportation duty is paid on the full value of the equipment. As construction contractors, the work at site is undertaken by them only by way of installation and erection of articles of machinery and other equipments and no new product is manufactured at site by assembling different articles. They also contended that even if it is admitted that assembly at site amounted to a manufacture of a new product, duty liability will arise at the place where the new article is manufactured and it was for the proper officer having jurisdiction over the site to see whether or not duty liability has been discharged. They also contended that a project as a whole is not an article or excisable goods falling under T.I. 68 or any other item of the Central Excise Tariff. It is not 'goods' at all. In this context they referred to Government of India's order-in-revision in the case of M/s. Otis Elevator (India) Ltd. [1981 (8) E.L.T. 720].

2.2. They had also contended that they got some of their goods fabricated through independent contractors on job work basis. Those independent contractors were manufacturers of goods in their own right and the goods produced by such independent manufacturers/independent contractors were either exempt from duty or duty might have been paid by them when cleared from the factories of such goods got manufactured by them through others.

2.3. They also contended that even if any duty was payable, which they denied, the demand for a period exceeding six months prior to the receipt of the show cause notice by them was time-barred as they did not conceal any