2001 (4) TMI 343 - AT - Central Excise

Summary

Issues:
1. Whether the industrial furnaces manufactured by the appellants are liable to duty under chapter heading 84.17?
2. Whether the furnaces, being attached to earth, can be considered as "goods" for the purpose of excise duty?
3. Whether the furnaces created by the appellants are immovable property and, therefore, not excisable goods?
4. Whether the judgment of the Additional Collector in 1985 holding that the furnaces did not attract duty impacts the present case?

Analysis:

1. The appellants manufacture industrial furnaces tailored to buyers' requirements, with sizes ranging from 230 sq. ft. to 3000 sq. ft. The parts are purchased and assembled at customers' premises. Show cause notices alleged duty evasion, totaling Rs. 73,98,416/-. The Commissioner upheld the duties and imposed a penalty. The appeals challenge this decision.

2. The law on goods attached to earth and immovable property is significant. Various judgments, including Tata Robins Fraser Ltd. v. C.C.E., Narne Tulaman Manufacturers Pvt. Ltd. v. C.C.E., and others, establish principles on the dutiability of such goods. The Supreme Court differentiated between goods and immovable property based on attachment to earth.

3. In Triveni Engineering & Indus. Ltd. v. C.C.E., the Supreme Court held that while combining a steam turbine and alternator created a new commodity, its attachment to earth rendered it immovable and non-excisable. Similarly, in Silical Metallurgic Ltd. v. C.C.E., the Tribunal ruled that electric arc furnaces, constructed with foundations embedded in the earth, were immovable property due to simultaneous construction with civil work.

4. The appellants' furnace creation process involves foundation work, casing, welding, and installation of pipes. This process mirrors the furnaces in Silical Metallwgic Ltd. v. C.C.E., leading to the conclusion that the appellants' furnaces are not goods attracting duty. The judgment of the Additional Collector in 1985, holding the furnaces not dutiable, supports this finding, negating claims of suppression in show cause notices.

In conclusion, the appeals succeed on merits and limitation grounds. The Tribunal held that the industrial furnaces manufactured by the appellants are not goods attracting duty under chapter heading 84.17, as they are considered immovable property due to their attachment to earth. The judgment of the Additional Collector in 1985 further supports this decision, leading to the allowance of the appeals with consequential relief.