Central Excise - Levy of duty on plastic fabrications at site as permanent fixtures - Central Excise - 25/89

Central Excise - Levy of duty on plastic fabrications at site as permanent fixtures Circular No. 25/89 Dated 19-4-1989 [From F. No. 93/12/89-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Levy of duty on plastic fabrications at site as permanent fixtures. It has been brought to the notice of the Board that excise duty is being sought to be levied on the assembly/installation/erection of various articles of plastics like chimneys, tanks, scrubbers, towers, hoppers etc. The manufacturers have represented that no excise duty should be levied on such goods which are only fabricated and erected at the site since, on the installation/assembly/erection of such goods at the site, those become immovable and no excise duty is leviable on immovable property which cannot be regarded as 'goods'. 2. The matter has been examined. It is observed that in view of entry No. 84, List I of the Seventh Schedule to the Constitution of India, duty of excise could be levied only on 'goods' as defined by the Hon'ble Supreme Court in D.C.M. cases and other subsequent cases, and not on immovable property. Therefore, if as a result of the assembly at site, a chimney or a tank or a scrubber or a tower or a hopper comes into existence in a movable condition prior to its installation in an immovable manner at the site, then only it can be charged to duty as a chimney or a tank or a scrubber or a tower or a hopper. This is the ratio laid down in Supreme Court decision affirming the orders of CEGAT on weighbridges reported in 1988 (38) E.L.T. 566. When parts or components of such goods are brought together at site, it cannot be viewed as manufacture of such goods in C.K.D. condition since the process of just purchasing and bringing together or transporting is not a process of manufacture. Accordingly, it is viewed that :- (i) duty would be chargeable on the parts and components of such goods leaving the factory on the condition in which they are removed. Thus, if together they can be regarded as chimney or tank or scrubber or tower or hopper in C.K.D. condition or having the essential character of the aforementioned goods, they would be chargeable to duty under headings/sub-headings appropriate to such goods in their complete form, otherwise such parts and components should be charged to duty under headings/sub-headings appropriate to such parts and components; (ii) at site, duty would be chargeable only if the assembly of parts/components results in a different recognisable marketable product before installation in an immovable manner. Mere bringing together of parts and components would not be excisable. (iii) However, at site, if the piece by piece erection or installation of parts or components results in to an immovable property, then no duty would be required to be levied on such property. 3. The above guidelines may be brought to the notice of the lower field formations and trade interests may also be suitably advised. 4. All pending assessments may be finalised on the above basis.