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TMI BlogExcisability of goods sent for integration at site.X X X X Extracts X X X X X X X X Extracts X X X X ..... Excisability of goods sent for integration at site. X X X X Extracts X X X X X X X X Extracts X X X X ..... system or a net-work of machines. The system comes into being upon assembly of its component . In such a situation there is no manufacture of "goods" as it is only a case of assembly of manufactured goods into a system. This cannot be compared to a fabrication where a group of machines themselves may be combined to constitute a new machine which has its own identity/marketability and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dutiable ( e.g. a paper making machine assembled at site and fixed to the earth only for the purpose of ensuring vibration free movement). Therefore, if i send various duty paid items (bought out items not manufactured by us) to site for integration i.e connectivity between systems by plugging, will it be exempted from payment of Excise duty as per the 37B order vide para no:IV ? Reply By Rajag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opalan Ranganathan: The Reply: Sir, You are sending various duty paid items (bought out items not manufactured by you) to site for integration i.e connectivity between systems by plugging. In this connection your attention is invited to para 4 (vi) of 37B order No: 58/1/2002 - CX, dated 15.01.2002 which states that- " If any goods installed at site (example paper making machine) are capab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of being sold or shifted as such after removal from the base and without dismantling into its components/parts, the goods would be considered to be moveable and thus excisable. The mere fact that the goods, though being capable of being sold or shifted without dismantling, are actually dismantled into their components/parts for ease of transportation etc., they will not cease to be dutiable m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely because they are transported in dismantled condition. Rule 2(a) of the Rules for the Interpretation of Central Excise Tariff will be attracted as the guiding factor is capability of being marketed in the original form and not whether it is actually dismantled or not, into its components. Each case will therefore have to be decided keeping in view the facts and circumstances, particularly w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether it is practically possible (considering the size and nature of the goods, the existence of appropriate transport by air, water, land for such size, capability of goods to move on self propulsion -ships- etc.) to remove and sell the goods as they are, without dismantling into their components. If the goods are incapable of being sold, shifted and marketed without first being dismantled into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... component parts, the goods would be considered as immovable and therefore not excisable to duty However, para 5 (i) of the above referred order states that- "Turn key projects like Steel Plants, Cement plants, Power plants etc. involving supply of large number of components, machinery, equipments, pipes and tubes etc. for their assembly/installation/ erection/integration/inter-connectivity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on foundation/civil structure etc. at site, will not be considered as excisable goods for imposition of central excise duty - the components, however, would be dutiable in the normal course. Therefore i would advise you to compare the facts with the above two paras and then come to a conclusion whether the machinery emerges is fixed to earth and the machinery is to be dismantled into its parts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd components if you want to remove the machinery to some other site. During such dismantling the parts and components are not damaged and when you erect the same at another site you have replace the damaged parts and components by new one. If it is not so then the machinery which is emerging by the integration process is not exempted from duty. Lastly the machinery should be enumerated under Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 84 of first schedule of Central Excise Tariff Act, 1985. If you have any further query, please write to me through this forum or to my e-mail id: [email protected]. Reply By Naveed S: The Reply: There has been instances wherein bought out goods (goods not manufactured but required for further use) are also bought and cleared by the assessee on Excise Invoice, provided no excess cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit is passed on, and under intimation to department.
Still for any further clarification, you may approach the jurisdictional Central Excise Hdqr. Technical Section on the issue. X X X X Extracts X X X X X X X X Extracts X X X X
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