2009 (10) TMI 442 - AT - Central Excise

Tank-Storage Tank- construction/fabrication of steel tank partly embedded in the earth. Impugned order holding that the tank not moveable product and could not be brought and sold in the market, therefore not excisable. Original authority not arrived at the finding that the embedment of part of the tank in the earth was merely for its operational purposes. Goods not excisable.

Summary

Issues: Challenge to order of Commissioner (Appeals) dropping proceedings for recovery of duty and penalty based on construction of steel tank without following Central Excise Procedure.

In this case, the appellant challenged the order passed by the Commissioner (Appeals) dropping the proceedings against the respondent for recovery of duty and penalty related to the construction of a steel tank without following the Central Excise Procedure. The Additional Commissioner had confirmed the liability of the respondents to pay duty, penalty, and interest for fabricating the steel tank, considering it as manufacturing under the Central Excise Act, 1944. However, the Commissioner (Appeals) set aside this order, stating that the tank was not a moveable product and could not be bought or sold in the market, thus not being excisable. The learned DR argued that the product was moveable and marketable, citing relevant case laws. The Tribunal referred to the Budhewal Cooperative Sugar Mills Ltd. case, where it was held that a storage tank erected on an RCC foundation by welding steel plates was immovable and lacked marketability, thus not subject to duty. The Tribunal found no fault with the Commissioner (Appeals) decision, as the tank in question was non-excisable due to its embedded nature in the earth, making it a non-moveable structure essential for its function. Consequently, the appeal was dismissed, upholding the decision of the Commissioner (Appeals) based on the principles established in the Budhewal Cooperative Sugar Mills Ltd. case.

In conclusion, the judgment revolved around the issue of whether a steel tank, constructed without following the Central Excise Procedure and embedded in the earth, was excisable under the Central Excise Act, 1944. The Commissioner (Appeals) had dropped the proceedings for duty and penalty recovery, considering the tank non-excisable due to its immovable nature and lack of marketability. The Tribunal upheld this decision, citing the Budhewal Cooperative Sugar Mills Ltd. case, which established that tanks welded on an RCC foundation were non-moveable and not subject to duty. The judgment emphasized the importance of marketability in determining excisability and concluded that the tank in question, being an essential non-moveable structure, was rightly deemed non-excisable.