2006 (6) TMI 13 - AT - Central Excise

Central Excise - Water treatment plant - Appellant bought out components to assembled water treatment plant and then fixed on foundation - Marketable and excisable goods before it is fixed on foundation - liable to duty

Summary

Issues:
1. Whether the appellant is liable to pay Central Excise duty for assembling a water treatment plant.
2. Whether the extended period of limitation can be invoked for the demand raised.
3. Whether the water treatment plant qualifies as excisable goods even after being fixed on a foundation.
4. Whether the water treatment plant should be considered as movable excisable goods or immovable property.

Analysis:
1. The appellant purchased a water treatment plant without manufacturer details or duty payment particulars. The Revenue contended that the appellant assembled the plant, making them the actual manufacturers liable for Central Excise duty. The authorities found the appellant purchased components and assembled the plant without reflecting it in Central Excise records, justifying the extended period. The Commissioner (Appeals) upheld the demand based on the Trade Notice criteria, where assembled machinery attracts Central Excise duty as excisable goods.

2. The appellant argued against the suppression charge, claiming the goods were purchased, not manufactured. However, the Tribunal held that assembling various components constituted manufacturing, justifying the extended period for the show cause notice.

3. The Tribunal clarified that assembling the water treatment plant was necessary for its functionality as a marketable commodity. The mere fact of fixing it on a foundation did not remove its classification as excisable goods. Citing precedent Mahendra & Mahendra Ltd. vs. CCE, the Tribunal affirmed the water treatment plant's status as excisable goods even after assembly.

4. The Tribunal determined the water treatment plant as movable excisable goods, citing the Supreme Court's decision in Sirpur Mills Ltd. vs. CCE. The purpose of fixing the plant on a foundation was for operational efficiency and safety, maintaining its classification as movable property. Precedents cited by the appellant were deemed irrelevant, and the appeal was dismissed based on established legal positions.