Immovable hydraulic lift not excisable as such; duty applies only to factory-made parts and unremitted collections remain recoverable.

A hydraulic lift erected and installed at site was treated as immovable property, so the assembled lift itself was not excisable under Heading 84.28; duty applied only to the factory-made parts and components cleared from the factory under Heading 84.31. Amounts collected from customers in excess of the duty actually payable and not deposited with the Government were recoverable under Section 11D(1). Because the principal duty demand was partly set aside, the penalty under Section 11AC was reduced, and the separate penalties under the Central Excise Rules were set aside.

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Issues: (i) whether a hydraulic lift erected and installed at site is excisable as a movable commodity in dismantled condition under Heading 84.28, or whether only the parts and components manufactured in the factory are dutiable under Heading 84.31; (ii) whether duty collected from customers but not deposited with the Government was recoverable under Section 11D(1) of the Central Excise Act, 1944; and (iii) whether the penalty imposed under Section 11AC of the Central Excise Act, 1944 and the allied penalties under the Central Excise Rules, 1944 were liable to be maintained.

Issue (i): whether a hydraulic lift erected and installed at site is excisable as a movable commodity in dismantled condition under Heading 84.28, or whether only the parts and components manufactured in the factory are dutiable under Heading 84.31.

Analysis: The lift came into existence only after erection and installation at the site and, once so installed, became part of the immovable property. The Tribunal followed the settled view that what leaves the factory as parts cannot be treated as the lift itself merely because the components are intended for assembly at site. On that basis, the lift as installed was not excisable, though the parts and components manufactured and cleared from the factory remained dutiable according to their own classification.

Conclusion: The duty demand on the entire contract value of the lift was set aside, and duty was held payable only on the parts and components manufactured in the factory under Heading 84.31.

Issue (ii): whether duty collected from customers but not deposited with the Government was recoverable under Section 11D(1) of the Central Excise Act, 1944.

Analysis: The appellants admitted liability for the amount recovered from customers in excess of the duty actually payable and retained without deposit in the Government account. That amount was, therefore, recoverable under the statutory provision governing such collections.

Conclusion: The demand under Section 11D(1) was confirmed.

Issue (iii): whether the penalty imposed under Section 11AC of the Central Excise Act, 1944 and the allied penalties under the Central Excise Rules, 1944 were liable to be maintained.

Analysis: Since the major part of the duty demand was set aside, the quantum of penalty under Section 11AC was required to be moderated. The separate penalties imposed under the Central Excise Rules, 1944 also did not survive in view of the relief granted on the principal duty issue.

Conclusion: The penalty under Section 11AC was reduced to Rs. 10,000, and the penalties under Rule 9(2), Rule 226 and Rule 209A of the Central Excise Rules, 1944 were set aside.

Final Conclusion: The dispute was resolved partly in favour of the assessee by denying duty on the installed lift as an immovable property, while sustaining the demand for unremitted customer collections and modifying the penalty consequences.

Ratio Decidendi: A lift becomes an immovable property only upon erection and installation at site, so the assembled lift is not excisable as such; duty can be levied only on the factory-made parts and components, apart from any statutory recovery of amounts collected from customers but not paid over.

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