Site-fabricated plant infrastructure exempt from excise duty, while remaining items stayed dutiable pending further factual inquiry.

Fabricated storage tanks, steam trap tanks, pipe and pipe fittings erected at site were treated as infrastructure-type items rather than complete machinery, so they fell within the exemption under Notification No. 118/75-C.E. and were not liable to excise duty. The remaining disputed items were held dutiable. The question whether items valued at Rs. 10,39,407 were manufactured in premises amounting to a factory under the Factories Act, 1948 was not finally resolved and was left for further inquiry and evidence.

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Issues: Whether storage tanks, steam trap tanks, pipe and pipe fittings fabricated in connection with the plants could be treated as complete machinery and subjected to excise duty, and whether duty was payable only on the balance of the disputed items.

Analysis: The fabricated storage tanks, steam trap tanks, pipe and pipe fittings were infrastructure-type items erected at site and, on their nature and commercial description, could not be regarded as complete machinery. Such items therefore fell within the scope of the exemption under Notification No. 118/75-C.E. The remaining items were treated as liable to duty, while the question whether the items valued at Rs. 10,39,407 were manufactured in premises amounting to a factory under the Factories Act, 1948 was left for further inquiry and evidence.

Conclusion: The storage tanks and similar fabricated items were not exigible to excise duty, while the balance of the items remained liable to duty; the dispute concerning the items allegedly manufactured in non-factory premises required further examination.

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