2007 (7) TMI 499 - AT - Central Excise

Summary

Issues:
1. Whether storage tanks are excisable goods liable for Central Excise duty?
2. Whether the Board's Circular regarding storage tanks applies to the present case?
3. Whether the demand and penalty imposed are sustainable?

Analysis:
1. The appellant contested the demand confirming storage tanks as excisable goods, arguing that tanks of huge capacity fabricated at the site and installed become immovable property, thus not liable for duty. The appellant relied on Board's Circular No. 58/1/02, stating that such tanks are not excisable goods. The Revenue contended that as per the contract, tanks were fabricated at the site, tested, and fixed on the foundation, making them movable and liable for duty. The Tribunal noted the Circular's clarification that huge tanks for storage of petroleum products, though not embedded in the earth, are not excisable goods as they cannot be physically moved and must be dismantled for sale.

2. The Tribunal found no dispute regarding the tanks' capacity and deemed the Board's Circular applicable to the case. Quoting the Circular, the Tribunal emphasized that tanks for storage of petroleum products in oil refineries, once erected at the site, cannot be physically moved and must be dismantled for sale, thus not considered excisable goods. Consequently, the Tribunal set aside the demand and consequential penalty, ruling in favor of the appellant.

3. In conclusion, the Tribunal relied on the Board's Circular to determine that the storage tanks in question are not excisable goods liable for Central Excise duty. Therefore, the demand and penalty imposed were deemed unsustainable and were set aside, resulting in the allowance of the appeal. The judgment was dictated and pronounced in open court by the Tribunal.