2004 (8) TMI 154 - AT - Central Excise

Summary

Issues: Excisability of Electro-Static Precipitators fabricated and erected by manufacturers of cement in 1983-84.

Analysis:
The issue in this appeal before the Appellate Tribunal CESTAT, Mumbai was the excisability of Electro-Static Precipitators (ESPs) fabricated and erected by the appellants, who are cement manufacturers. The appellants argued that ESPs should not be subject to excise duty as they are immovable property. On the other hand, the Revenue contended that ESPs fall under Tariff Item 68 of the Central Excise Tariff and are chargeable to duty.

The Tribunal considered the nature and function of ESPs, highlighting that they are essential plants used in industries and power stations to remove fine dust from exhaust gases. ESPs consist of a large steel box with electrodes inside, designed to attract and collect dust particles from the gases. The clean gas is then released into the atmosphere. The Tribunal noted that ESPs are embedded in concrete foundations, indicating their immovable nature.

In its analysis, the Tribunal referred to relevant legal precedents, including the decisions of the Supreme Court in cases involving the classification of equipment as immovable property. The Tribunal also cited a Circular issued by the Central Board of Excise and Customs (CBEC), which clarified that items assembled or erected at a site and attached to the earth, making them immovable and not subject to excise duty if they cannot be dismantled without substantial damage to their components.

Relying on the Supreme Court decisions and the CBEC Circular, the Tribunal concluded that the ESPs fabricated and erected by the appellants do not qualify as 'Goods' liable to excise duty. Therefore, the Tribunal set aside the duty demand upheld in the impugned order and allowed the appeal in favor of the appellants.