9911796707
TMI Blog1994 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... Salt Act, 1944 (`Act' for short). 2.To answer the issue, few facts are necessary to be narrated. The appellant was engaged in the manufacture of welded steel pipes and tubes which were classified before 1-8-1983 under Item 28AA of the First Schedule to the Act. Later on these items came to fall under Tariff Item 25 of the Schedule. The steel tubes and pipes produced by the appellant were exempt from duty as they were produced out of duty paid raw material. For the manufacture of these items the appellant had set up plant and machinery at its factory site. The first phase of installation was completed in the year 1974 by putting up all processes of tube making such as slitting line, tube rolling plant, welding plant, testing equipment and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. 31/76 dated 28-3-1976 having fully exempted the `iron and steel products' listed at Sl. No. 22 of the aforesaid notification from the operation of Rule 174 of the Central Excise Rules, 1944, the appellant was not required to take any licence. In 1983, however, the Inspector, Central Excise, sent a letter to the appellant regarding manufacture of steel pipes and tubes made out of steel strips exceeding 5 mm in thickness informing the appellant that the Superintendent, Central Excise, desires checking of the records to ascertain proof of payment of duty on raw materials received in the factory for manufacture of steel pipes and tubes. The appellant was required to arrange all the relevant records at the factory premises. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant in 1981 and other details about balance sheet etc. On the same day, the plant and machinery installed in the appellant's factory consisting of the tube mill and the welding head were seized by the Preventive Officers. The seizure memo indicates that what was seized was `Plants & Machinery-Tube Mill & Welding Head manufactured and installed in premises of M/s. Quality Steel Tube (P) Ltd. during 2nd phase of expansion in 1981-82'. On 11th April, 1984, the Assistant Collector sent a letter, the relevant portions of which are extracted below :- "From perusal of Chapter VI of the Project Report and Balance Sheet for the years 1980-81 and 1981-82 submitted by you, it has been observed that estimated cost of plant & machinery i.e. Tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e explanation and it was held that the welding head was imported by the appellant from USA and likewise the tube mill manufactured by the appellant was transportable, transferable and saleable. Consequently, the two machineries under reference did not become a part of immoveable property. It was also held that to become goods under the Act it was not necessary that it should be actually bought and sold. Since the unit erected and installed by the appellant was marketable or saleable, the appellant was liable to pay duty on it. The Tribunal also went in detail on the question whether the machinery and tube [mill] installed by the appellant were goods even though they were embedded to the earth and held that even if it was not a goods under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in Collector of Central Excise v. Ambalal Sarabhai Enterprises, 1989 (43) E.L.T. 214. The Court has held in Union Carbide India Ltd. v. Union of India & Ors. - 1986 (24) E.L.T. 169 (SC) = (1986) 2 SCC 547 that even if a goods was capable of being brought to market, it would satisfy the test of marketability. The basic test, therefore, of levying duty under the Act is two fold. One, that any article must be a goods and second, that it should be marketable or capable of being brought to market. Goods which are attached to the earth and thus become immoveable do not satisfy the test of being goods within the meaning of the Act nor it can be said to be capable of being brought to the market for being bought and sold. Therefore, both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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