Site-erected chiller plant as immovable property: assembled refrigeration system not treated as excisable goods.

A chiller plant assembled and commissioned at the customer's site, grouted to a concrete foundation and functioning as a complete refrigeration system, was treated as immovable property rather than excisable goods. The fact that individual components could be detached after unfastening nuts and bolts did not make the plant movable as a whole. Because such a system comes into existence only through site assembly and connection of parts, it is not liable to central excise duty merely because its components are duty-paid goods. The cited Board circular and Supreme Court principle on plant erected on a specially constructed base supported this view, and the demand, penalties and consequential reliefs were set aside.

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Issues: Whether the chiller plant assembled and commissioned at the customer's site was immovable property and therefore not excisable goods liable to central excise duty.

Analysis: The plant was assembled from duty-paid components as part of a refrigeration system and was grouted to a concrete foundation at site. The fact that individual components could be detached by unfastening nuts and bolts did not make the plant as a whole movable. A refrigeration or air-conditioning system comes into existence only by assembly and connection of its parts and cannot be treated as excisable goods merely because its components are dutiable. The cited Board circular and the Supreme Court decision on erection of plant on a specially constructed base supported the view that such a site-erected system, considered as a whole, is not goods.

Conclusion: The chiller plant was not excisable goods and no duty was leviable; the demand, penalties and consequential reliefs were set aside in favour of the assessee.

Ratio Decidendi: A plant or system erected at site on a permanent foundation, which is movable only in its disassembled components and not as a whole, is immovable property and does not constitute excisable goods.

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