Marketability test excludes site-assembled air-conditioning plant from central excise duty when it is not sold as a movable machine.

A centrally installed air-conditioning plant erected and commissioned at customers' premises was treated as a site-assembled system, not a marketable machine capable of sale as such. Because it could be transported only after dismantling, the test of marketability was not satisfied and the plant did not qualify as excisable goods. The Board's Section 37B clarification also stated that an air-conditioning system as a whole is not excisable goods. The plant was therefore not exigible to central excise duty.

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Issues: Whether a centrally installed air-conditioning plant erected and commissioned at customers' premises is excisable goods and liable to central excise duty.

Analysis: The plant was treated as a system assembled and commissioned at site, not as a marketable machine capable of being sold as such. The finding that it could be transported only after dismantling supported the conclusion that the test of marketability was not satisfied. The Board's clarification under Section 37B of the Central Excise Act also stated that an air-conditioning system as a whole cannot be considered excisable goods.

Conclusion: The plant is not exigible to central excise duty.

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