Tribunal rules diesel generating sets non-excisable due to attachment, grants relief

The Tribunal allowed the appellant's appeal, setting aside the demand and penalty for manufacturing diesel generating sets. The Tribunal held that the sets, attached to earth, were not excisable goods as they were non-marketable. Despite ruling in favor of the appellant on merits, the Tribunal also considered the limitation period for duty demand, noting that no suppression could be attributed to the appellant. The judgment emphasized the non-excisability of the sets due to their attachment to concrete platforms and granted consequential relief to the appellant.

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Issues:
1. Allegation of manufacturing diesel generating sets and duty payment.
2. Applicability of excise duty on fabricated D.G. sets.
3. Interpretation of whether the D.G. sets are excisable goods.
4. Consideration of limitation period for duty demand.

Analysis:
1. The appellant was alleged to have manufactured two diesel generating sets and was issued a show cause notice for duty payment. The notice proposed a demand of approximately &8377; 76 Lakhs along with a penalty of &8377; 15 Lakhs. The Commissioner confirmed the demand and penalty, leading to the present appeal by the appellant.

2. The appellant contended that the huge D.G. sets, attached to earth, were incapable of being brought and sold, thus not constituting excisable goods. The appellant procured various parts from different manufacturers, assembled them, and erected the D.G. sets under supervision. The Tribunal's decision in a similar case was cited, where attachment to a concrete platform was deemed non-marketable and non-excisable.

3. The Hon'ble Supreme Court's decision in the case of Sirpur Paper Mills Ltd. was referenced by the respondent to argue that fixing machines for wobble-free functioning does not classify them as attached to earth. Various tribunal decisions were also cited, but the Tribunal found the facts similar to the case where the Supreme Court upheld the non-excisability of D.G. sets attached to concrete platforms.

4. Despite ruling in favor of the appellant on merits, the Tribunal also considered the limitation period for duty demand. The appellant informed the Central Excise Authorities about the fabrication in 1989, and the Tribunal noted that no suppression could be attributed to the appellant to uphold a longer limitation period. The Tribunal observed that the D.G. sets were not portable and were used in a separate building, supporting the non-levy of duty.

5. Consequently, the Tribunal set aside the impugned order, allowing the appeal on both merits and limitation, providing consequential relief to the appellant. The judgment highlighted the non-excisability of the D.G. sets due to their attachment to earth and the absence of suppression for a longer limitation period for duty demand.

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