2001 (6) TMI 606 - AT - Central Excise

Issues Involved:
1. Classification of the item as Effluent Treatment Plant (ETP) or Bio-gas plant.
2. Determination of the item's movability and marketability.
3. Excisability of the item under the Central Excise Act.
4. Allegation of wilful suppression with intent to evade payment of duty.

Issue-wise Detailed Analysis:

1. Classification of the Item:
The core issue was whether the item erected by the appellant was an Effluent Treatment Plant (ETP) or a Bio-gas plant. The Department, based on the process and components involved, concluded that it was an ETP and not a Bio-gas plant. This classification was critical because it determined the applicability of specific excise duty notifications and potential exemptions.

2. Movability and Marketability:
The appellants argued that the erected item was an immovable property, constructed piece-by-piece on a concrete foundation, making it non-movable and non-marketable. They cited the Board's Circular No. 17/89, which stated that such structures attached to the earth are immovable property and not subject to excise duty. The Department countered that the item could be dismantled and re-fabricated, thus being movable and marketable. The Commissioner relied on the cross-examination of Shri R. Rajendran, who admitted that the MS sheets could be cut and re-fabricated, albeit with a reduction in the digester's volume.

3. Excisability under the Central Excise Act:
The Department asserted that the erected item was excisable under Section 2(d) of the Central Excise Act, as it was movable and marketable. The Commissioner referenced the case of C.C.E., Jaipur v. Western India Enterprises Ltd., where similar activities were deemed to amount to manufacture. However, the appellants maintained that the item was immovable property, as supported by the Board's Circular and several judicial precedents, including the Supreme Court's judgment in Triveni Engineering & Industries Ltd. v. C.C.E., which emphasized that items that become immovable upon erection are not excisable.

4. Allegation of Wilful Suppression:
The Department alleged that the appellants had wilfully suppressed facts and misled the authorities to evade duty. They argued that the appellants misdeclared the item as a Bio-gas plant to avail benefits under specific notifications. The appellants refuted this, stating that the Department was aware of all facts, and there was no wilful suppression. Given the conclusion that the item was not excisable, the Tribunal found it unnecessary to delve into the suppression allegation.

Conclusion:
The Tribunal concluded that the item in question, constructed on a concrete foundation and welded piece-by-piece, resulted in an immovable property. This conclusion was supported by the Board's Circular No. 17/89 and the Supreme Court's judgment in Triveni Engineering & Industries Ltd. The Tribunal noted that the Department failed to establish that the resultant product was goods and not immovable property. Consequently, the Tribunal set aside the impugned order, ruling that the item was not excisable under the Central Excise Act, and allowed the appeals with consequential relief. The question of suppression and extension of the larger period was deemed irrelevant due to the non-excisability of the item.

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