Curtain Glass Affixed To Building Not Removable, Hence Not Liable To Central Excise Duty: CESTAT

Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) were addressing the issue of whether the curtain glass fixed by the assessee in the form of works contract on the walls of buildings can be charged to central excise duty.

In this case, the assessee/respondent is a construction contractor and during the relevant period carried out construction of curtain walls/structural glazing and aluminium cladding to various buildings, hotels, offices etc.

Thus, a curtain glass is created for the building. The assessee also manufactured some doors and windows. The five SCNs covering different periods proposed recovery of duty on the doors and windows manufactured by the assessee as well as on the curtain walls manufactured by the assessee.

The Commissioner held that the doors and windows do come into existence in the factory and, therefore, were chargeable to excise duty. However, considering the total turnover of the doors and windows cleared, the Commissioner found that the turnover was below the threshold for charging duty and, therefore, no central excise duty was payable.

The bench disagreed with the revenue that the Commissioner failed to give his finding on the contention of the department that the respondent was paying sales tax on the value of sales in respect of the curtain walls which means that the sale of goods preceded the activity of actual erection of the curtain glass.

Sales tax is levied on either sale or deemed sale of goods and NOT on manufacture. Central excise duty cannot be charged on any goods simply because they are sold. It is for the department to establish that there was manufacture of goods, added the bench.

The bench stated that no excisable goods came into existence in the process and aluminium sections and glass are fixed by the assessee on the walls when the curtain glass comes into existence. The curtain glass cannot be removed and fixed elsewhere. For this reason, no central excise duty was payable on the curtain glass.

In view of the above, the Tribunal dismissed the appeal.

Case Title: Commissioner of Central Excise, Delhi – II v. M/s AGV Alfag Ltd.

Case Number: EXCISE APPEAL NO. 2764 OF 2011

Counsel for Appellant/ Department: Rakesh Aggarwal

Counsel for Respondent/ Assessee: Rajesh Jain, Ramashish and Tanya Sarawat

Click Here To Read/Download Order