Curtain Wall Glazing Not ‘Manufactured Goods’; Excise Duty Demand Quashed: CESTAT
Pranav B Prem
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member), has dismissed an appeal filed by the Revenue against the 2011 order of the Commissioner of Central Excise, Delhi-II, which had set aside excise duty demands raised on curtain wall glazing and aluminium cladding works carried out by M/s AGV Alfab Ltd. The Tribunal reaffirmed that curtain walls, once fixed to buildings, form an integral and immovable part of the structure, and therefore cannot be considered “manufactured goods” for excise purposes.
Background
The respondent, M/s AGV Alfab Ltd., is a construction contractor engaged in executing works involving curtain wall/structural glazing and aluminium cladding on various commercial buildings, hotels, and offices. The process involved mapping and marking building walls, fixing clamps, attaching vertical and horizontal aluminium sections, applying double-sided tape, fixing customised toughened glass panels, and permanently sealing them with structural silicon. Through this process, curtain walls were created as part of the building. In addition to this activity, the respondent also manufactured some aluminium doors and windows in its factory. The Revenue issued five show cause notices for the period September 2007 to December 2010, demanding central excise duty both on the doors/windows and on the curtain wall structures.
By order dated 10.08.2011, the Commissioner held that the aluminium doors and windows manufactured in the factory were excisable, but since their turnover was below the prescribed threshold, no duty was payable. As regards curtain walls, the Commissioner relied on an earlier decision of CESTAT in AGV Alfab Ltd. v. Commissioner of Central Excise, Delhi-II [2005 (186) E.L.T. 451 (Tri.-Del.)], which had held that curtain walls constructed on-site were not “manufactured goods” but part of a works contract. Based on this precedent, the Commissioner dropped the demands.
Revenue’s Appeal
The Revenue challenged the order, contending that:
Since the contractor had paid sales tax on curtain walls, it implied that a sale of goods had taken place prior to erection, thereby attracting excise duty.
The assessee was registered for service tax for fabrication and erection of curtain walls, and therefore excise duty could also be levied.
The Commissioner erred in relying on the earlier Tribunal decision, as it had not considered the aspect of sales tax being paid.
Findings of CESTAT
The Tribunal framed the issue as whether curtain wall glazing fixed by the respondent at construction sites could be considered excisable goods. It noted that in its earlier 2004 decision involving the same respondent, it had already held that curtain walls are constructed on-site, are too large to be manufactured in a factory, and once installed, cannot be removed or re-fixed elsewhere as goods. The earlier decision had also held that cutting aluminium angles, drilling holes, and fixing them with glass did not amount to manufacture of a new commercial product.
Importantly, the Tribunal recorded that this 2004 decision had never been appealed by the Revenue, as confirmed by a letter from the Assistant Commissioner (Tech), Central Excise, Delhi, dated 08.12.2008. Thus, judicial discipline required the Commissioner to follow the precedent.
On the Revenue’s reliance on sales tax payments, the Tribunal categorically rejected the contention, observing:“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. The order of the Tribunal is that there was no manufacture.”
Similarly, the Tribunal dismissed the Revenue’s submission regarding dual taxation. It clarified that service tax liability on works contracts operates independently of excise duty, and the mere fact that service tax is paid does not establish that excisable goods were manufactured. Finally, the Tribunal criticised the Revenue for attempting to reopen settled issues, noting that the Committee of Chief Commissioners who reviewed the order should have been aware of the distinction between sales tax and excise duty.
Holding that no infirmity existed in the Commissioner’s order, the Tribunal upheld the dropping of demands and dismissed the Revenue’s appeal. It concluded that curtain wall glazing and aluminium cladding executed at site by the respondent were part of works contracts and not “manufactured goods” liable to excise duty. The appeal was dismissed on 22.08.2025, with the Bench reiterating that excise duty liability must be founded on the existence of a manufactured, marketable product – a condition absent in the case of curtain wall glazing affixed to buildings.
Appearance
Shri Rakesh Aggarwal, Authorized Representative (DR) – For the Department
Shri Rajesh Jain, Shri Ramashish and Ms. Tanya Sarawat, Advocates – For the respondent.
Cause Title: Commissioner of Central Excise, Delhi – II V. M/s AGV Alfag Ltd.
Case No: Excise Appeal No. 2764 Of 2011
Coram: Justice Dilip Gupta [President], P.V. Subba Rao [Technical Member]
