Excise duty upheld on assembled paper-making machine as movable, new marketable commodity under Section 3 Central Excise Act

SC held excise duty is leviable on the paper-making machine assembled and erected by the appellant. The Court found the machine was not immovable property merely because it was attached to the ground for operational efficiency; it could be removed and sold. The assembly and fabrication of components produced a new marketable commodity distinct from the purchased parts, bringing it within the charging provisions of the Central Excise Act. Appeal dismissed and duty upheld against the assessee.

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Issues:
Leviability of excise duty on paper making machine assembled using duty paid components and fabricated parts in the factory.

Detailed Analysis:

1. The appellant contended that the paper making machine, assembled using duty paid components and fabricated parts in their factory, should not be subject to excise duty as it was immovable property and not marketable under the Central Excise Act. The appellant argued that the machine's components had to be put together at the site where it was erected, making it immovable and not falling under the Act's charging section.

2. The appellant's counsel argued that the machine was permanently attached to the ground, essential for its operation, and could not be sold in the market due to its nature. It was further emphasized that the machine was erected on a turnkey basis at the site, embedded in a concrete base to become a permanent fixture.

3. The Tribunal rejected these contentions, stating that the machine's attachment to the earth was for operational efficiency and safety, preventing wobbling. The Tribunal also found that the paper making machine was saleable, as it could be dismantled and sold in parts if someone wished to purchase it.

4. The Tribunal's findings indicated that the machine was not immovable property like a building or tree but a movable item attached to earth for operational efficiency. It was highlighted that the appellant could remove the machine from its base and sell it if desired, indicating marketability.

5. The argument that anything embedded in earth should be treated as immovable property was refuted, using the example of a water pump fixed on a cement base. The Tribunal's finding that the paper making machine could be sold in the market negated the appellant's claim of it being immovable property due to being fixed for better functioning.

6. The appellant's argument that the entire machinery could not be bought and sold without dismantling was countered by the Tribunal, pointing out that the appellant had purchased components, fabricated parts, and assembled the machine on-site. The Tribunal's reasoning on this aspect was deemed sound.

7. Lastly, the contention that the paper making machine was not truly manufactured by the appellant was dismissed. It was clarified that despite purchasing components and fabricating parts, the final product, the paper making machine, was distinct and marketable, emerging as a new commodity through the appellant's manufacturing activity.

8. The issue of marketability, being a question of fact, led to the dismissal of the appeal by the Tribunal. It was concluded that there was no basis for interference with the Tribunal's decision, as it was not based on any material fact omission or perversity.

9. The appeal was ultimately dismissed with no order as to costs, upholding the Tribunal's decision on the leviability of excise duty on the paper making machine assembled by the appellant.

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