2005 (7) TMI 168 - AT - Central Excise

Summary

Issues involved:
1. Whether the installation of Fire Alarm Systems and Closed Circuit Television Systems constitutes excisable goods under the Central Excise Act.

Analysis:
1. The appellants are engaged in the installation of Fire Alarm Systems (FAS) and Closed Circuit Television Systems (CCTV) at various customer premises. The systems involve purchasing equipment locally or importing them, which are then dispatched directly to the work sites for installation. The entire system becomes part of the civil structure and can only be shifted by dismantling it into components. The issue revolves around whether these systems are excisable goods under the Central Excise Act.

2. The Tribunal referred to a previous case involving a Fire Alarm System where it was established that the system did not come into existence at the factory of the appellants. The Fire Alarm System consists of two parts, and the appellants only manufactured certain components, not the detecting part. Considering this, it was concluded that the value of components brought from outside cannot be added to the Fire Alarm System for levy of duty. The Tribunal also noted that if goods are incapable of being sold, shifted, and marketed without being dismantled into component parts, they would be considered immovable and not excisable to duty. Relying on various Supreme Court decisions, the Tribunal found no merit in considering Fire Alarm Systems and CCTV Systems as excisable goods that come into existence at a site and cannot be shifted as whole systems.

3. Based on the above analysis, the Tribunal found no merits in the case and set aside the order, ruling that the appellants are not liable to pay duty under the Central Excise Act on such systems. The judgment highlights the importance of understanding the manufacturing process and components involved in determining the excisability of goods under the law.