Excise on fabricated structural steel parts fails where the items become immovable components of a factory shed.

Fabricated columns, girders, trusses and purlins made from duty-paid iron and steel and incorporated into a factory shed were treated as non-excisable because excise applies only where manufacture produces a distinct, movable and marketable good. Cutting, drilling, riveting, welding and fastening were described as processes that enabled incorporation into the structure, not the creation of commercially known goods. The structural items were said to become immovable parts of the shed, so the trade notice and related demand could not stand to that extent. The note states that the excise demand was set aside for those items on the settled tests of manufacture and marketability.

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Issues: (i) Whether columns, girders, trusses and purlins fabricated from duty-paid iron and steel materials and incorporated into a factory shed were excisable goods liable to central excise duty; (ii) Whether the trade notice and consequential demand could be sustained in the circumstances, including the availability of an alternate remedy.

Issue (i): Whether columns, girders, trusses and purlins fabricated from duty-paid iron and steel materials and incorporated into a factory shed were excisable goods liable to central excise duty.

Analysis: Excise is attracted only when a process amounts to manufacture and results in goods having a distinct name, character and use. The materials used were already duty-paid; the operations of cutting, drilling, riveting, welding and fastening merely enabled their incorporation in the structure and did not bring into existence commercially known movable goods. The items became integral parts of the shed and were immovable in character. On the settled tests of manufacture and marketability, the Department failed to show that the articles were excisable goods.

Conclusion: The items were not exigible to excise duty and the challenge succeeded in favour of the assessee.

Issue (ii): Whether the trade notice and consequential demand could be sustained in the circumstances, including the availability of an alternate remedy.

Analysis: Once the articles themselves were found not exigible, the trade notice treating them as dutiable could not stand to that extent. The Court also found no reason to drive the assessee to the departmental remedy when the issue was capable of being decided on the admitted facts and the Department had produced no material showing excisability.

Conclusion: The trade notice and the notice dated 22 March 1988 were invalid and quashed to the extent they related to the said items.

Final Conclusion: The writ petition succeeded substantially, the impugned demand action was set aside as far as the specified structural items were concerned, and no costs were awarded.

Ratio Decidendi: For central excise, an article must emerge from manufacture as a movable and marketable good with a distinct identity; fabricated parts that merely become immovable components of a building or structure are not excisable goods.

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