Site-erected diesel generating sets are not excisable goods when they lose movability and marketability after installation.

Diesel generating sets assembled, installed and commissioned at a customer's site on a concrete foundation, with the engine, alternator and allied equipment permanently grouted and interconnected, were treated as an erected power-generating installation rather than movable goods. The governing principle applied was that excisability depends on manufacture of a product that is movable and marketable; an installation that cannot be removed and sold as such without dismantling does not satisfy that test. On that reasoning, the site-assembled generating set was held not to be excisable goods but immovable property, and the duty demand on that basis could not survive.

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Issues: Whether diesel generating sets assembled, installed and commissioned at site became excisable goods or remained immovable property.

Analysis: The decisive facts were that the engine, alternator and allied equipment were assembled at the customer's site on a concrete foundation, permanently grouted and rooted, and thereafter interconnected with auxiliary systems to form a complete power-generating installation. On the majority view, the process was one of erection and installation of an integrated plant rather than manufacture of movable goods. The installation could not be treated as a marketable commodity capable of being removed as such without dismantling. The governing principle drawn from the Supreme Court authorities was that excisability requires a manufactured product answering the test of movability and marketability.

Conclusion: The diesel generating sets were not excisable goods but an immovable property, and duty demand on that basis could not survive.

Ratio Decidendi: An item assembled and permanently installed at site is not excisable unless it emerges as movable and marketable goods; mere fixation on a concrete base for functional stability does not by itself make it immovable, but a site-erected system that cannot be taken to market as such is not manufacture of excisable goods.

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