Movability and tariff classification of storage tanks governed excise liability, while penalty failed because the provision was not yet in force.

Excise duty on storage tanks depended on whether they were movable and marketable goods; the record was insufficient to finally decide movability, so that issue was remanded for fresh factual examination. Classification under Heading 84.19 was rejected because a component placed in a plant does not become plant merely by installation, and the tanks were held classifiable under Heading 73.09. Non-disclosure of the fabrication activity justified invocation of the extended period of limitation. Penalty under Section 11AC and interest under Section 11AB were set aside because Section 11AC was not in force for the relevant period.

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Issues: (i) whether the storage tanks were movable goods capable of being brought to market and therefore liable to central excise duty; (ii) whether the tanks were classifiable as plant under Heading 84.19 or as storage tanks under Heading 73.09; (iii) whether the extended period of limitation was invocable; and (iv) whether penalty and interest under Section 11AC and Section 11AB of the Central Excise Act, 1944 could be sustained.

Issue (i): Whether the storage tanks were movable goods capable of being brought to market and therefore liable to central excise duty.

Analysis: For excisability, the goods must be movable and capable of being marketed. The record did not clearly establish the manner of fabrication, the size of the tanks, or whether they were fabricated at one place and shifted to the site of use. On these facts, the question of movability could not be finally resolved on the existing material.

Conclusion: The issue was remanded to the Adjudicating Authority for fresh examination of the factual position.

Issue (ii): Whether the tanks were classifiable as plant under Heading 84.19 or as storage tanks under Heading 73.09.

Analysis: A component placed in a plant does not by itself become plant. The tanks were specifically covered by Heading 73.09 and could not be treated as plant merely because they formed part of the manufacturing setup.

Conclusion: Classification under Heading 84.19 was rejected and the tanks were held classifiable under Heading 73.09.

Issue (iii): Whether the extended period of limitation was invocable.

Analysis: The fabrication activity had not been disclosed to the Department. On that basis, suppression was accepted for the purpose of limitation.

Conclusion: The extended period of limitation was held invocable.

Issue (iv): Whether penalty and interest under Section 11AC and Section 11AB of the Central Excise Act, 1944 could be sustained.

Analysis: Section 11AC had not come into force for the period in dispute, so penalty under that provision could not be imposed. Consequential interest under Section 11AB was also set aside.

Conclusion: Penalty and interest under Section 11AC and Section 11AB were set aside.

Final Conclusion: The dispute was sent back for readjudication on the movability and related factual issues, while the Tribunal upheld the revenue's stand on classification and limitation and granted relief against penalty and interest.

Ratio Decidendi: Excise duty applies only to movable and marketable goods; tanks specifically covered by the tariff cannot be treated as plant merely because they are installed in a plant, and penalty cannot be imposed under a provision not in force for the relevant period.

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