2006 (2) TMI 410 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty for two diesel generating sets (D.G. Sets).
2. Contention regarding marketability of the D.G. Sets and sustainability of demand.
3. Interpretation of the Hon'ble Supreme Court decision in Triveni Engineering & Indus. Ltd. v. Commissioner of Central Excise.
4. Application of the Central Board of Excise and Customs Circular on excisability of goods.

Analysis:
The appellant filed an application seeking waiver of pre-deposit of duty and penalty concerning two diesel generating sets (D.G. Sets) fabricated in the factory. The appellant argued that each D.G. Set, weighing approximately 65 tonnes and capable of generating 6 MW of power, was assembled using duty-paid parts procured from the market. The appellant contended that as the complete D.G. Set was not movable as such, relying on the precedent set by the Hon'ble Supreme Court in the case of Triveni Engineering & Indus. Ltd. v. Commissioner of Central Excise. On the other hand, the Revenue contended that the D.G. Sets were marketable, justifying the demand made.

The Tribunal found that the two D.G. Sets in question were fabricated at the site, with each set weighing around 65 tonnes. There was no evidence to suggest that these D.G. Sets could be removed as a whole. Citing the decision of the Hon'ble Supreme Court in Triveni Engineering & Indus Ltd. v. Commissioner of Central Excise, where the court emphasized the marketability test requiring goods to be in a position to be taken to the market as such, the Tribunal noted that the D.G. Sets were not movable without dismantling. Referring to a Circular issued by the Central Board of Excise and Customs, it was clarified that goods capable of being removed without dismantling into components are excisable, while those requiring dismantling are considered immovable and not excisable. Based on the Supreme Court decision and the Circular, the Tribunal found a strong case in favor of the appellant, leading to the waiver of pre-deposit of duty and penalty for the appeal, with the stay petition being allowed.