2007 (2) TMI 142 - AT - Central Excise

Manufacturing of parts of Sugar plant at site As per circular 58/02, if goods are incapable of being sold, shifted without dismantling, then goods would be considered as immovable and hence not excisable

Summary

Issues:
Appeal arising from duty demands on parts and accessories for sugar plant, claim of items not being excisable goods, invocation of extended period of limitation, assembly of disputed items at the site of sugar factories, applicability of the market ability test, reliance on previous judgments and circulars, disagreement with the Commissioner's order.

Analysis:
1. The appeals involve duty demands on various parts and accessories for a sugar plant, contested by the appellants claiming these items are not excisable goods or eligible for exemption under Notification 67/95 for captive consumption. The duty demands, along with penalties, were confirmed by the Commissioner of Central Excise, Pune, for the period between April 2001 to October 2003.

2. The department's argument is centered around the assembly of disputed items at the sugar factories' sites, contending that these items were not supplied as a whole but assembled from various parts and components provided by the factories. The department highlights the complexity and size of the items, asserting that they need to be dismantled before transport and installation at any other site, invoking the market ability test criteria.

3. The Tribunal references the Supreme Court's decision in Triveni Engineering & Indus, Ltd. v. CCE, emphasizing the requirement for goods to be capable of being sold or shifted without dismantling into component parts to be considered excisable. This interpretation is further supported by Circular No. 58/1/2002-CX, which clarifies the excisability of goods based on their movability without dismantling, in alignment with previous Supreme Court judgments.

4. The Commissioner's reliance on the Tribunal's decision in CCE, Chennai v. Binny Ltd. is noted, where similar items were deemed excisable. However, the appellants did not challenge this classification as excisable goods in that case due to the demand being time-barred. Considering the precedents and circulars, the Tribunal sets aside the duty demands and penalties in both appeals, disagreeing with the Commissioner's order and allowing the appeals in favor of the appellants.