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2008 (6) TMI 125 - AT - Central ExciseElectric power Fencing System by use of solar power Excisability - in view of Circular dated 15-1-02, contention of appellant that impugned item is an immovable property fixed to earth, hence, it would not be excisable, is accepted held that solar powered electric fence can t be called as machine held that only individual components of electric power fencing system are excisable, not complete system - Original Authority is not justified in classifying the impugned item u/h 8543.90 of CET
Issues Involved:
1. Classification of the Electric Power Fencing System. 2. Excisability of the Electric Power Fencing System as an immovable property. Detailed Analysis: 1. Classification of the Electric Power Fencing System: The primary issue is whether the Electric Power Fencing System should be classified under Chapter Sub-Heading 8543.90 of the Central Excise Tariff. The Original Authority classified the item under this heading, which pertains to "Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this Chapter," and demanded appropriate duty along with penalties. The appellant contested this classification, arguing that the item does not fall under Chapter 85. The advocate for the appellant stated that the Show Cause Notice lacked evidence or basis for this classification and did not rely on any Section Note or Chapter Note. The Special Counsel for the Revenue referred to Note 4 and Note 5 of Section XVI of the Central Excise Tariff to support the classification. - Note 5 of Section XVI: Defines 'machine' as any machine, machinery, plant, equipment, apparatus, or appliance cited in the headings of Chapter 84 or Chapter 85. The appellant argued that since the solar power electric fence is not cited in Chapter 84 or 85, it should not be classified under Chapter 85. - Note 4 of Section XVI: States that a machine consisting of individual components intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85 should be classified under the heading appropriate to that function. The appellant argued that the function of "deterring intrusion" is not mentioned in Chapter heading 8543.90, ruling out this classification. The Tribunal concluded that the solar-powered electric fence cannot be classified as a machine, equipment, or appliance but only as a system. The Tribunal emphasized that the basic meaning of words cannot be lost sight of while deciding the classification. 2. Excisability of the Electric Power Fencing System as an Immovable Property: The second issue is whether the Electric Power Fencing System can be considered excisable if it is deemed an immovable property fixed to the earth. The appellant argued that the item is an immovable property and relied on the Board's Circular dated 15-1-2002, which clarifies that goods incapable of being sold, shifted, and marketed without first being dismantled into component parts are considered immovable and not excisable. The Tribunal examined the excisability of the item in light of the Board's Circular and several Apex Court judgments. The Tribunal noted that the item is a fence, and its components include wooden posts, steel, and aluminum wires. The fence, once erected, cannot be removed without dismantling into components, and its configuration depends on the geometry of the area. The Tribunal referred to Para 4 (vi) of the Board's Circular, which states that if goods are incapable of being sold, shifted, and marketed without being dismantled into component parts, they are considered immovable and not excisable. The Tribunal also considered the decision in the BPL Mobile Communications Systems case, where the Tribunal held that sub-systems forming a network are not excisable as they need to be dismantled into components for transportation. The Tribunal concluded that the electric power fencing system, when assembled at the site, ceases to be an excisable commodity in terms of the Central Excise Tariff. Conclusion: The Tribunal held that: 1. The Electric Power Fencing System is not classifiable under Chapter 8543.90 as it cannot be called a machine, equipment, or appliance but only a system. 2. In light of the Board's Circular dated 15-1-2002, the item does not pass the movability test and is considered immovable and not excisable. The Tribunal set aside the impugned order and allowed the appeal with consequential relief.
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