Dutiability of Effluent Treatment Plants (ETP) under Heading 84.19 - Clarification regarding - Central Excise - 17/89

Dutiability of Effluent Treatment Plants (ETP) under Heading 84.19 - Clarification regarding Circular No. 17/89 Dated 21-4-1989 [From F. No. 207/73/88-CX.6] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi Subject : Dutiability of Effluent Treatment Plants (ETP) under Heading 84.19 - Clarification regarding. Doubts have been raised whether Effluent Treatment Plants which are assembled at site and attached to the ground would be excisable in view of specific mention in Heading No. 84.19 of Central Excise Tariff Act, 1985. 2. The matter has been examined. It is observed that in view of Entry No. 84 of List I of the Seventh Schedule to the Constitution of India, duty of excise would be levied only on 'goods' and not on immovable property. The goods should be classified and charged to duty according to the condition in which they are removed from the factory, and at site duty could be charged on manufacture or assembly of parts and components when a different recognisable marketable product is obtained before it is installed or attached to the earth. But the mere bringing together of parts and components at site should not be regarded as manufacture of Effluent Treatment Plants in unassembled/disassembled condition since purchase and transportation is not a process of manufacture. Accordingly, it has been decided that - (I) Duty would be chargeable on parts and components leaving the factory according to the conditions in which they are removed, i.e., if together they can be regarded as ETPs in un-assembled/dis-assembled condition or having the essential character of ETPs, they would be covered by sub-heading 8419.00 as ETPs. Otherwise, they would be charged to duty as parts and components under the appropriate heading. (ii) At site if the assembly of parts and components results in ETP coming into existence, as a distinct marketable product which is capable of being brought to the market for being bought and sold prior to its attachment to earth, duty would be leviable on such ETPs under sub-heading 8419.00. However, where parts or components are fixed, installed or erected in such a way that the final article comes into existence only in the shape of an immovable structure attached to the earth, it is properly regarded as immovable property and not goods liable to Central Excise duty. It may be noted that Tariff sub-heading No. 8419.00 does not say specifically that plants attached to earth are also taxable thereunder. 3. To illustrate, if plates, channels etc. for water tank are taken to site and first a tank is fabricated at site which is then lifted and placed in position and permanently attached to the earth/building, then a water tank comes into existence as goods capable of being brought and sold in the market and is liable to Central Excise duty. But where such tank comes into existence by fixing piece by piece while attached to the earth, it would be regarded as part of immovable property not liable to Central Excise duty.