TMI Blog2001 (6) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... cted herein below :- "4. I have carefully considered the appeal, the submissions made during the hearing, the detailed paper book and the case laws relied upon by the appellants. It is obvious that the controversy can be resolved only on a clear finding as to whether the various components manufacture as well as bought from the open market and removed in that condition by the appellants can be regarded as lifts in SKD/CKD condition, on the ground that these components put together have already attained the essential character of a lift, and they are cleared in knocked down condition only for the convenience of transport. If not, it has further to be decided whether after erection and commission, excisable goods answering to the description of lift has come into existence or not. In this connection, it will be useful to refer to the various processes and stages undertaken by the appellants before a lift used in any residential flats or office complex or anywhere else comes into being. A lift consists of the following major components and stages according to the write up furnished by the appellants :- (i) Machine Room Equipments such as (a) Controller (b) Gear Unit (c) Over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... positioned in the machine room. Rope is passed through this and clamped to the safety device in the car. A tension weight is provided in the pit through which the overspeed governor rope passed. Tension weight bracket is grouted. This completes the safety alignment. 10. The counter weight is positioned between the guide rails by means of guide choos and fillers for balancing the car is added to the counter weight frame. 11. The ropes to hang the car and counter weight are measured and cut. The ends are prepared and clamped to the car and the counter weight by suspension fastenings. 12. The car door consisting of door operator, car sill, door panels is fixed on to the car body and adjusted precisely to synchronise with the landing doors. 13. Blocks and cast in the pit and buffer springs are placed on the top of it. This act as safeties against over travel. Pockets are cut in the front walls and boxes are grouted. The signal equipments are then fixed on to the boxes. With this the mechanical installation is completed. 14. Depending on the wiring diagram provided for the particular installation the wiring is done in the job by connecting different switches on the car and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otion and the potential to move up and down at the prescribed speed and with the prescribed load, and the main suspension ropes are the ropes through which the car body and the counter weight frame assembly are suspended; and finally, the shaft wiring equipment is responsible for ensuring power supply to the car and signalisation, etc., etc. All the above components become functional only at the site after being erected and after such erection they are immovable and for the purpose of Central Excise Act, the lift as found in the customer's site is not liable to Central Excise Duty. 6. In view of the above discussions, I hold that the component parts manufactured by the appellants alone would be subject to excise levy as parts of lifts under Chapter Heading 84.31 and the valuation should be according to cost of construction taking into account the proportionate escalation charges in the contract value. Bought out items undergoing any, further process of manufacture in the appellant's factory or at site would also be liable to Central Excise duty. The Order-in-Original is modified accordingly." 2. Assessee has also filed cross appeal on the ground that proportionate escalation ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel referred to the entire technical literature, specifications and enormous evidence on record to contend that lift will not come into existence unless it is constructed along with immovable property and if the installation becomes operational it assumes into a immovable property. He referred to various IS specifications, technical literature, and various other material on record to contend that the item viz. lifts as parts are assembled at the site along with construction of the building and the lift becomes functional only if it is fully become part and parcel of the immovable property. He contends that the issue is fully covered by the judgment of the Apex Court rendered in the case of Triveni Engg. Industries Ltd. v. CCE reported in 2000 (120) E.L.T. 273 (S.C.) wherein the Apex Court clearly laid down that after assembly, when the item continues to be goods, only then it can be held to be excisable goods. However, on completion of process of erection, if the item becomes immovable property, then it is not excisable. The Apex Court has taken into consideration the earlier judgment rendered and distinguished Narne Tulaman Manufacturers Pvt. Ltd v. CCE, Hyderabad case, 1988 (38) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. 8. On careful consideration of the submissions, and examination of the records, we notice that the Commissioner has examined in great length the entire material and has clearly concluded that what was removed were only parts and they cannot be treated as lift for the reason that lift would come into existence only after they are installed along with immovable property and becomes functional. They relied on Chapter Note 4 to Section XVI of CETA which is not applicable in this case as Chapter Note 4 would come into play where all the parts are put into the operation immovable property comes into existence like conveyor, etc., which are independent of immovable property and are functional as final goods. In the present case, such a possibility has not been discussed by the Commissioner (Appeals). The entire findings clearly indicates that the item ought to be fixed to the building including landing doors, pulleys, CWT, guide rails, ropes and fastenings for lifts, safety, buffer for electrical passengers and goods lifts. All these operations would be possible only if they are fixed to the building and the lift operates as part and parcel of immovable property. Therefore, all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suming that the elevators and escalators are goods, the petitioners would be eligible to get the benefit of Notification No. 85/79 which exempts goods falling under Tariff Item 68 and manufactured in premises other than a factory. (iii) They have further stated that in view of the above erection of lifts which is different from manufacture of goods should not attract duty and that in case the above two contentions are not found acceptable then they should at least get the benefit of exclusion of post-manufacturing expenses while determining the assessable value." 4. Government find considerable force in the petitioners contention referred to the Para 3(i) above that elevators and escalators erected and installed by them become a part of immovable property and hence, are not goods. In the judgment of the High Court of Bombay referred to above the Court have held that the contract for erection and installation of elevators was a composite and indivisible contract for work and labour and that it cannot be regarded as a contract for sale of goods. Government further, observe that elevators and escalators installed in buildings are firmly affixed to the building and are not intended ..... 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