Site-fabricated HVAC ducts not excisable where they form part of an integrated plant and lack marketability.

Ducts fabricated at site as part of an integrated HVAC plant were not treated as marketable excisable goods, because the contract involved supply, installation, erection and commissioning of a system rather than sale of separate articles. Applying settled precedent and the relevant circular, the tribunal held that such site-fabricated ducts were not shown to be goods known to the market as capable of being bought and sold. The duty demand and penalty were therefore unsustainable, and the Revenue's challenge failed.

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Issues: Whether ducts fabricated at site during supply, installation, erection and commissioning of HVAC systems were marketable excisable goods liable to central excise duty.

Analysis: The dispute was covered by the assessee's own earlier decision and by settled precedent. The ducts were fabricated as part of an integrated air-conditioning plant contract, and the relevant circular treated an air-conditioning plant as a system rather than as separate goods. On that basis, the fabricated ducts were not treated as articles known to the market capable of being bought and sold as such.

Conclusion: The ducts were not excisable goods and the duty demand and penalty were not sustainable.

Final Conclusion: The Revenue's challenge failed and the order setting aside the duty demand was upheld.

Ratio Decidendi: Goods fabricated at site as part of an integrated plant/system are not dutiable unless they are shown to be marketable excisable goods.

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