2008 (6) TMI 116 - AT - Central Excise

Exigiblity to excise duty of the activity of assembling a Generator Set at site by the assessee using bought-out components - DG set is assembled and bolted to the concrete platform so that its operation is vibration free. The DG set could be easily unbolted and bought and sold. Therefore DG set assembled at site cannot be held to be immovable property held that they are goods and are marketable - DG set assembled at the site has to be held to be marketable and excisable

Summary

Issues involved: Exigibility to excise duty of assembling a Generator Set at site using bought-out components.

Detailed Analysis:
1. Issue of Exigibility to Excise Duty: The Tribunal addressed the issue of whether the activity of assembling a Generator Set at the site using bought-out components is exigible to excise duty. The Tribunal noted that the appellants had purchased components from a supplier and assembled the Generator Set at the site. The appellants argued that the Generator Set was not goods and not marketable as it was assembled on-site. However, the Tribunal found that the Generator Set was assembled, bolted to a concrete platform, and could be easily unbolted and bought and sold. Drawing on the judgment in the Sirpur Paper Mills Ltd. case, the Tribunal held that just because machinery is fixed for better functioning does not make it immovable property. As the Generator Set was marketable and could be dismantled and sold, it was deemed excisable. Therefore, the Tribunal upheld the original authority's decision to confiscate the Generator Set, demand duty, impose a penalty, and order redemption on payment of a fine.

2. Application of Precedents: The Tribunal referred to previous judgments of the Apex Court in cases such as Mittal Engineering Works, Sirpur Paper Mills Limited, and Triveni Engg. Works Ltd. to analyze the issue at hand. These judgments provided guidance on the marketability of assembled machinery and the distinction between immovable property and goods. The Tribunal relied on the Sirpur Paper Mills Ltd. case to establish that the assembly and erection of machinery at the site do not automatically classify it as immovable property if it can be dismantled and sold. By applying the principles established in these precedents, the Tribunal concluded that the Generator Set assembled at the site was indeed marketable and subject to excise duty.

3. Decision and Dismissal of Appeal: After considering the arguments presented by both parties and analyzing the facts of the case in light of relevant legal precedents, the Tribunal dismissed the appeal. The Tribunal found no reason to interfere with the impugned order that upheld the original authority's decision regarding the confiscation of the Generator Set, duty demand, penalty imposition, and redemption order. The decision was based on the marketability of the Generator Set, its assembly at the site using bought-out components, and the applicability of excise duty in such circumstances.

In conclusion, the Tribunal's judgment clarified the exigibility of excise duty on the activity of assembling a Generator Set at the site using bought-out components, emphasizing the marketability of the assembled product and drawing on relevant legal precedents to support its decision.