1985 (10) TMI 210 - AT - Central Excise

Summary

Issues:
- Appeal against confiscation of Rubber Mill by Collector of Central Excise
- Allegation of non-payment of Central Excise duty on the Mill
- Argument regarding machinery being installed and part of immovable property
- Interpretation of the term "goods" under Central Excise Rules
- Comparison of various judicial decisions on the definition of "goods"

Analysis:

The appeal was filed by M/s. Premier Tyres Limited against the Collector of Central Excise, Bombay II's order confiscating a Rubber Mill valued at Rs. 8,75,000 and allowing redemption on payment of a fine of Rs. 50,000. The appellants argued that they purchased the Mill from M/s. Sohal Engineering Works, with Central Excise duty paid by the supplier. Despite installation in their factory, a show cause notice alleged non-payment of duty, leading to confiscation under Rule 173Q. The Collector rejected their explanation, prompting the appeal.

The appellants contended that the machinery, once installed, ceased to be "goods" and was part of immovable property, hence not liable to confiscation under Rule 173Q. Citing various judicial decisions, the Advocate argued that "goods" cannot include immovable property. The Advocate also highlighted Rule 173Q, emphasizing that only excisable goods were subject to confiscation under it, which did not apply to the installed machinery in this case.

The Respondent, supporting the Collector's decision, relied on precedents indicating that goods not paying duty were liable to confiscation even in the hands of the purchaser. The Judge analyzed the term "goods" under Central Excise Rules, referring to Supreme Court decisions and the Constitution's definition. Noting the distinction between "things" and "goods," the Judge concluded that the machinery, once installed, did not meet the definition of "goods" and could not be confiscated under Rule 173Q.

The judgment emphasized that "goods" could not include immovable property, contrary to the Collector's conclusion. The Judge found the Collector's decision erroneous in light of the legal authorities cited by the Advocate. The judgment set aside the Collector's order, ruling that the machinery, being installed and part of immovable property, was not liable to confiscation under the applicable rules. The appeal was allowed in favor of the appellants.