CESTAT Rules Curtain Glass Fixed to Building Not Liable to Central Excise Duty

CESTAT Rules Curtain Glass Fixed to Building Not Liable to Central Excise Duty

Introduction

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that curtain glass/structural glazing affixed to a building is not removable and hence not liable to central excise duty. The ruling came from a bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member).

Factual Background

The assessee/respondent, a construction contractor, executed contracts for construction of curtain walls/structural glazing and aluminium cladding for various buildings, including hotels and offices. The assessee also manufactured some doors and windows. The Revenue issued five show cause notices (SCNs) proposing recovery of excise duty on both the doors/windows and the curtain walls.

Procedural Background

The Commissioner held that doors and windows came into existence in the factory and were therefore dutiable. However, since the turnover was below the exemption threshold, no central excise duty was payable.

The Revenue department appealed, contending that the Commissioner ignored the fact that the assessee was paying sales tax on curtain walls, implying that these were goods sold prior to erection.

Contentions and Observations

• No Manufacture of Excisable Goods: The Tribunal observed that no excisable goods came into existence in the process of affixing aluminium sections and glass to building walls.
• Curtain Glass Not Removable: Since the curtain glass becomes part of the building and cannot be removed or re-fixed elsewhere, it does not qualify as movable goods.
• Sales Tax vs. Central Excise Duty: The bench clarified that sales tax is levied on sale/deemed sale of goods, not on manufacture. Excise duty cannot be imposed merely because sales tax has been paid.

Reasoning and Analysis

The CESTAT rejected the Revenue’s argument and emphasized that the department failed to prove “manufacture” of excisable goods. It reiterated that curtain glass is integral to the building structure and therefore not subject to central excise duty.

Implications

The ruling provides clarity for construction contractors by confirming that structural glazing/curtain glass affixed to buildings is outside the scope of central excise duty. It also highlights that sales tax liability cannot automatically translate into excise duty liability.

In this case, the Revenue/Appellant was represented by Mr. Rakesh Aggarwal, Advocate, while the Respondent was represented by Mr. Rajesh Jain, Mr. Ramashish, and Ms. Tanya Sarawat, Advocates.