Sec 3 of Central Excise Act 1944 is the charging section.
As per the section Excise Duty will be leviable if there is
1)Manufacture
2)Excisable goods
3)India
The goods have to be movable and marketable.So with regard to
criteria of "movable" many supreme court judgements have been
delivered as under:-
a)Sirpur Paper Mills ltd.vs CCE,Hyderabad[1998(97)ELT3(SC)]
b)Duncan Industries ltd.vsCCE Mumbai[2000(88)ECR 19(SC)]
c)Quality Steel Tubes Pvt. Ltd.vs. CCE[1995(75)ELT17(SC)]
The judgements in various cases bring out the following important
points as under:-
-For goods manufactured or erected at a site to be dutiable
they should have a new identity,character,distinct form the inputs/components
that have gone in to the production of the good .Such goods should be
mentioned in Central Excise Tarrif Act 1985 as being excisable.
-where processing of inputs results into new product with a new identity
then excise duty would be chargeable on the goods immediately.
-Where identity of the new product comes in to existence only after it
becomes a part of immovable property then there would be no "manufacture of goods"
-In "Otis Elevators India Co.Ltd" reported in 1981 ELT 720(GOI) it was held that lifts
and escalators which are installed in buildings and permanently fitted in to civil
structure cannot be considered to be excisable goods.
-If there is a system or assembly of machines then there is no manufacture of goods
as it is only assembly of manufactured goods in to system.
-If items erected at site and atached by foundation of earth cannot be dismantled
without substantial damage to its components,then the item would not be considered
as "movable".
-If items erected at site and atached by foundation of earth can be dismantled
without substantial damage to its components,then the item would be considered
as "movable".
-The mere fact that the goods are dismanteled into components merely for ease in
transportation will not render it to be immovable.It is movable.
-The test is capability of being moved from one place to other place or being moved
as such.Also there has to be capability of being marketed in original form whether
or not it is dismanteled in to its components.
-If the goods are not capable of being moved from one place to other place without
dismantling it in to components then it would be immovable.If any plant & machinery
or any other good causes damage to itself or other property due to its movement then
it is "immovable".
-Turn key projects like steel plants,Cement plants,Steel Plants involving supply of
huge components would be "immovable" so not excisable.But the components will be duitable.
-Refrigerator/ AIr COnditioning Plants are immovable but "Air Conditioning Unit" is movable
and so excisable.
So each and every case is to be seen whether it is practicable to move the
goods or not by air,water,land.This will decide the excisability of
Plant & Machinery and other goods assembled or erected at site.
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