Site-installed chlorination plant held immovable and non-excisable where permanent embedding prevented removal without damage.

A chlorination plant assembled and installed at the customer's site on a turnkey basis was treated as immovable property because the components were grouted to civil foundations, connected by pipelines and fittings, and intended to remain permanently attached. Excise duty applies only if a movable commercial commodity emerges; on the record, the Revenue did not prove that the plant could be dismantled and relocated intact without damage. The plant was therefore held non-excisable, the duty demand and penalties were set aside, and the appeals were allowed.

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Issues: Whether a chlorination plant assembled and installed at site on a turnkey basis, after being grouted and permanently attached to civil foundations, remained an immovable property not liable to excise duty.

Analysis: The plant was erected at the customer's site by assembling manufactured and bought-out components, which were grouted to the earth and connected by pipelines and other fittings. The reasoning adopted was that excisability depends on whether a movable commercial commodity emerges; where the process results in a plant that is permanently embedded and cannot be dismantled and shifted without damage, it assumes the character of immovable property. The Board circular on turnkey projects and the earlier remand directions required examination of this aspect, and the record did not show that the Revenue proved the plant could be removed intact and relocated. The facts were found to be distinguishable from a mobile hot mix plant, since the chlorination plant was intended to remain permanently attached to the premises.

Conclusion: The chlorination plant installed at site was held to be immovable property and therefore not excisable; the duty demand and penalties were set aside and the appeals were allowed.

Ratio Decidendi: A plant erected at site becomes non-excisable when, on assembly and permanent embedding in civil foundations, it does not emerge as a movable commercial commodity capable of removal without substantial damage.

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