Site-erected furniture and immovable goods: excisability remanded, while extended limitation was barred due to bona fide dispute.

Furniture and allied items erected at site during interior furnishing contracts required reconsideration because the dispute turned on whether they were movable excisable goods or articles of an immovable nature fixed piece by piece at site; the impugned order on excisability was set aside and the matter remanded for fresh adjudication. On limitation, penalty and interest had already been dropped on the finding of a genuine duty dispute and absence of mala fides, and those findings had attained finality; accordingly, the extended period was not available and the demand beyond the normal period was barred, with penalty and interest remaining set aside.

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Issues: (i) Whether furniture and allied items erected at site in the course of interior furnishing contracts were dutiable excisable goods; (ii) Whether the demand could be sustained by invoking the extended period of limitation and consequential penalty and interest could be upheld.

Issue (i): Whether furniture and allied items erected at site in the course of interior furnishing contracts were dutiable excisable goods.

Analysis: The dispute turned on whether the items manufactured at site were movable furniture or articles of an immovable nature fixed piece by piece at site. Earlier decisions dealing with similar contracts and the Supreme Court view on site-erected storage cabinets and kitchen counters were relevant to determine whether the goods retained the character of excisable goods. In the absence of a fresh adjudication in the light of those decisions, the matter required reconsideration by the original authority.

Conclusion: The impugned order on excisability was set aside and the matter was remanded for fresh decision.

Issue (ii): Whether the demand could be sustained by invoking the extended period of limitation and consequential penalty and interest could be upheld.

Analysis: Penalty and interest had already been dropped on the finding that there was a genuine dispute on duty liability and no mala fides were established. Those findings were not challenged by the Revenue and had attained finality. For the same reasons, the longer limitation period was not available, because the absence of mala fides and the existence of a bona fide dispute undermined invocation of the extended period.

Conclusion: The demand beyond the normal period of limitation was held to be barred, and the issues of penalty and interest remained set aside.

Final Conclusion: The dispute was sent back for fresh adjudication on excisability, while the portion of the demand falling beyond the normal limitation period could not be sustained.

Ratio Decidendi: Items erected at site and having the character of immovable property are not to be treated as excisable furniture, and where a bona fide dispute exists without mala fides, the extended period of limitation and related penal consequences are not available.

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