Marketability test defeats excise duty on site-erected BTS/BSC transmission systems that are not movable goods.

Installed BTS/BSC transmission apparatus is not excisable unless it is a distinct commodity that is movable and marketable. The Bombay HC treated the site-erected system, consisting of components fixed to the earth or building, as incapable of ordinary sale in the market because relocation would require dismantling, with damage to parts and reassembly at another site. Applying the Board circular on assembled and erected items, the installation was characterised as immovable rather than movable goods, and therefore outside central excise duty.

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Issues: Whether the assembled and installed BTS/BSC transmission apparatus constituted excisable goods liable to central excise duty, and whether it satisfied the test of marketability notwithstanding its erection at site and need for dismantling for relocation.

Analysis: Excise duty is attracted only when manufacture results in a distinct commodity that is movable and marketable. Even if assembly at site brings into existence a new product with a separate identity, the decisive inquiry remains whether the product can ordinarily be brought to market and sold as such. The installed BTS/BSC system was found to comprise multiple components embedded in or fixed to the earth or building, and relocation would require dismantling with damage to parts and reassembly at a new site. The Court treated such characteristics as inconsistent with movability and marketability. The Board circular was applied on the footing that items assembled and erected on a foundation, which cannot be dismantled without substantial damage and reassembled, are not movable goods and are not excisable.

Conclusion: The BTS/BSC installation was held not to be movable or marketable excisable goods, and therefore not liable to central excise duty. The revenue's challenge failed on the substantive questions decided.

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