Arijit Pasayat, J. - (1.) These appeals have been directed against the judgment of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (in short CESTAT). Challenge before the CESTAT was to the order in original 7/04 dated 14.7.2004 passed by a Commissioner of Central Excise, Bangalore No. 3. By the said order the Commissioner confirmed demands on bringing into existence electric power fencing system by use of solar power. The same was classified in sub-heading 8543.90 as other electrical machinery and apparatus having individual functions. The Commissioner had invoked larger period in terms of Section 11A of the Central Excise Act, 1944 (in short the Act). He confirmed the duty demand and also imposed like sum as penalty under Section 11AC of the Act. Penalty of rupees five lakhs was also levied on the Managing Director. According to the Revenue for the purpose of manufacture and clearance of the said item, namely, solar power electric power fencing system, the appellant brings various items which are also duty paid such as insulator, insulation test tool kit, battery charger and also procure various items from outside stores. They get GI wire, springs, battery, solar panel and Voltage Stabilizer etc. as bought out items and procured items such as Kiwitha Post, posts and pipes etc. on job work basis and imported certain items as such six channel controller and key pad etc. These are all erected as a fence at various sites. The Commissioner after examining Section 2(b) of the Act held that process of erection of the fence at the site will bring into existence this item as a new product distinct from all the products used. According to the assessee, the item is fixed on the walls and separately also on poles and they are not classifiable as electrical machines and apparatus having individual function under heading 8543.90. The Tribunal repealed the contention of the assessee and held as follows:On a careful consideration and examining the impugned order, and the record, we are satisfied that the item which has come into existence is an electrical appliances having individual functions. All the items are put together to bring into existence this item, Electric Power Fencing system and the same is also powered by using solar power. The catalogue as well as the statement of the MD is relied by Revenue to say that the item can be relocated and item can be saved and it does not get destroyed and dismantled merely because the evidence has to be reused if at all for use in other places does not mean that the item has got destroyed while refixing the same. The item has not become immovable property on erection piece by piece. The poles are fixed and the wires are fenced with all the other parts. The fence gives electric shock to animals when they want to cross the same it acts not only as an electrical barrier but also as a psychological barrier as no human or domestic animal having felt the shock once will attempt to go anywhere near the fence again. The power fence systems of various components which are brought out and some are manufactured and some are imported. They are all assembled to bring into existence solar power fence as a system. There is no civil work for erection and the item does not become part and parcel of Immovable property as contended. Therefore, the item satisfies the tariff description. We are of the considered opinion that it is goods and liable for duty in the Chapter heading already noted supra. However, the prayer of the appellant for modvat credit and cum duty benefit is required to be extended in terms of the ratio of the judgment cited (supra). The submission that the demands are partly time barred as the department was aware of all the details collected by them for 1998 and the show cause notice issued in 2003 makes the demands time barred is a well considered plea and require to be accepted in the light of the following judgments cited by them. 1) Cosmic Dye Chemical v. CCE Bombay, 1995 (75) ELT 721(SC) 2) CCE v. Chemphar Drugs & Linements, (1990) 184 ITR 224(SC) 3) Padmini Products v. CCE, (1990) 185 ITR 440(SC) 4) Pushpam Pharmaceuticals Company v. CCE Bombay, 1995 (78) ELT 401(SC) The penalty of Rs. 5 lakhs on the Managing Director is excess. Hence it is reduced to Rs. 50,000/-. The matter is remanded to Commissioner for re-working out after granting benefit of modvat and treating clearance as cum duty as pleaded by the appellants in the light of large bench judgment rendered in the case of Shre Chakra Tyres. Appeals are allowed by remand only for recomputation of duty. Order accordingly.
(2.) However, the penalty was reduced to Rs. 50,000/- in the case of the Managing Director.
(3.) In support of the appeal leaned counsel for the appellant submitted that the excisability on plant and machinery assembled at site has been considered by this Court and placed strong reliance on decision of this Court in Commissioner of Central Excise, Indore v. Virdi Brothers, 2007 (207) ELT 321(SC) .;