Site-based excise exemption for project-specific prefabricated components used solely in the same construction work

Prefabricated structural components manufactured at a project yard and used exclusively in the same construction project fell within the exemption for goods manufactured at the site of construction for use in construction work at that site. The term "site" was treated broadly to include premises made available to the manufacturer under the construction contract, as clarified by the Board circular, where the goods were produced solely for that work. Because the components were unique to the designated project and met both the manufacture and end-use conditions, the exemption applied and the excise demand was not sustainable.

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Issues: Whether prefabricated structural components manufactured at a yard and supplied exclusively for use in the same construction project were covered by the exemption for goods manufactured at the site of construction for use in construction work at such site.

Analysis: The goods were manufactured for DMRC projects and were unique in nature, with utility confined to the designated project site. The exemption notification covered goods manufactured at the site of construction for use in construction work at such site. The expression "site" was also clarified by the Board circular to include premises made available to the manufacturer under the construction contract, where the goods so manufactured were used solely in that construction work. The components in question satisfied both the manufacturing and end-use requirements, and the Tribunal's view was consistent with the notification and circular.

Conclusion: The exemption was to the respondents and the demand of excise duty was not sustainable.

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