Immovable property test for CKD/SKD boilers: assembled site-installed boilers were held non-excisable, defeating the duty demand.

Boilers cleared in CKD/SKD condition and assembled at the buyer's site on a concrete foundation were found to have become immovable property, as the completed system could be removed only by dismantling. On that factual basis, the Tribunal applied the settled position in the binding precedents and circulars that such assembled structures are not excisable goods. Excise duty could therefore not be demanded on the resultant boiler as immovable property, and the duty demand was held unsustainable.

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Issues: Whether boilers cleared in CKD/SKD condition and assembled at the buyer's site became immovable property and, if so, whether duty could be demanded on the assembled boilers.

Analysis: The appeals were decided after remand in the light of the Supreme Court's directions and the Board's circulars. The decisive factual finding was that the assessee had cleared boiler components on payment of duty, the components were assembled piece by piece at the customer's site on a concrete foundation, and the resulting boiler could be removed only by dismantling it. On that footing, the assembled boiler and associated system had ceased to be movable goods and had become immovable property. The Tribunal treated that factual position as controlling and held that the settled legal position, as reflected in the binding precedents and the circulars, did not permit excise duty to be demanded on such immovable property.

Conclusion: The demand of excise duty on the assembled boilers was unsustainable and the appeals were allowed.

Ratio Decidendi: Goods cleared in CKD/SKD condition which, on assembly and erection at the buyer's site, become immovable property are not excisable, and no duty can be demanded on the resultant structure as such.

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