2019 (8) TMI 256 - AT - Central Excise

Tribunal deems chlorination plant as immovable property, not subject to excise duty.

M/s. Babubhai Narottamdas & Co., Shri Dipen Ramesh Kocha, Shri Ramesh Babubhai Kocha, Shri Prashant Ramesh Kocha Versus Commissioner of Central Excise Mumbai-V

M/s. Babubhai Narottamdas & Co., Shri Dipen Ramesh Kocha, Shri Ramesh Babubhai Kocha, Shri Prashant Ramesh Kocha Versus Commissioner of Central Excise ... Issues Involved:1. Abatement of appeal due to the death of an appellant.2. Whether the chlorination plant installed at various sites is considered excisable goods or immovable property.3. Compliance with the Tribunal's directive for physical inspection.4. Applicability of Board's circular and relevant judicial precedents on the excisability of turnkey projects.Issue-wise Detailed Analysis:1. Abatement of Appeal Due to Death of an Appellant:The learned Advocate submitted that appeal No. E/308/2011 filed by Shri Prashant Ramesh Kocha abates due to his death on 15.06.2014. The death certificate was provided, and the Revenue had no objection. Hence, the appeal was abated, and the other appeals were taken up for disposal.2. Excisability of Chlorination Plant:The appellants, engaged in manufacturing chlorination equipment and turnkey projects, faced a demand for duty amounting to Rs. 88,15,196/- for the period 2002-03 to 2006-07. The core issue was whether the chlorination plant installed at various sites constituted excisable goods or immovable property. The appellants argued that the plant, being permanently attached to the earth and civil foundations, should be considered immovable property, thus non-excisable. They cited the Board's circular dated 15.01.2002 and several judicial precedents, including the Supreme Court's judgment in Solid & Correct Engineering Works and Triveni Engineering, to support their claim.3. Compliance with Tribunal's Directive for Physical Inspection:In the first round of litigation, the Tribunal had remanded the matter to the adjudicating authority, directing them to examine the issue in light of the Board's circular and, if necessary, conduct a physical inspection of the chlorination plant. However, the adjudicating authority issued the de novo order without undertaking the physical inspection, merely reiterating that the plant was excisable.4. Applicability of Board's Circular and Judicial Precedents:The Tribunal emphasized that the chlorination plant, assembled and permanently attached to the earth at various sites, should be considered immovable property. The Tribunal referenced the Board's circular and judicial precedents, including the High Court's judgment in Larsen & Toubro and the Tribunal's decisions in Ion Exchange Ltd. and Chemtec Water Conditioners, which held that assembly and installation of various components resulting in an immovable property are non-excisable.The Tribunal concluded that the chlorination plant, being permanently fixed and not intended to be moved, does not constitute excisable goods. The Tribunal found no evidence from the Revenue to suggest that the plant could be dismantled and shifted without damage, reinforcing the immovable nature of the plant.Conclusion:The Tribunal set aside the impugned order, holding that the chlorination plant installed at various sites is an immovable property and not subject to excise duty. The appeals were allowed with consequential relief as per law.