Suppression, excisability and valuation of generating sets: disclosure, removability and normal profit determine duty liability.

Wilful suppression can justify invocation of the extended limitation period where an assessee fails to disclose manufacture and installation of excisable goods and the facts emerge only on inspection. Manufacturer liability turns on who actually assembled the generating sets from purchased components, and bolted installation on a frame does not by itself make the equipment immovable or outside excise duty because it can be removed and sold. A general plea of discriminatory enforcement is insufficient without particulars of comparable cases. For valuation, normal profit may be added under the prescribed valuation rules where applicable.

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Issues: (i) whether the extended period of limitation was available on account of wilful suppression of the manufacture and installation of generating sets; (ii) whether the appellants or the supplier was the manufacturer liable to pay duty; (iii) whether the generating sets were immovable property and therefore outside excise duty; (iv) whether there was discriminatory enforcement because other mills were not made to pay duty; and (v) whether the addition of 10% profit in valuation was permissible.

Issue (i): whether the extended period of limitation was available on account of wilful suppression of the manufacture and installation of generating sets.

Analysis: Earlier trade notices had created uncertainty, but subsequent trade notices clarified that merely bolting a generator set to the ground did not make it immovable and that dutiability had to be examined case by case. In that setting, disclosure of assembly and installation was necessary for departmental scrutiny. The appellants did not disclose the manufacture and installation, and the fact came to light only on inspection.

Conclusion: The extended period of limitation was available against the assessee.

Issue (ii): whether the appellants or the supplier was the manufacturer liable to pay duty.

Analysis: Liability depended on the factual finding as to who actually manufactured the generating sets. On inspection of the invoices and surrounding material, the authorities found that the appellants had purchased components and assembled the sets themselves. That finding was affirmed as a factual conclusion with no perversity shown.

Conclusion: The appellants were treated as the manufacturers and were liable to duty.

Issue (iii): whether the generating sets were immovable property and therefore outside excise duty.

Analysis: The generating sets were only bolted on a frame. Such fixation did not make them permanently immovable because they could be unbolted, shifted and sold. The nature of the installation therefore did not exclude excisability.

Conclusion: The generating sets were not immovable property for excise purposes.

Issue (iv): whether there was discriminatory enforcement because other mills were not made to pay duty.

Analysis: A plea of discrimination required particulars showing comparable cases and differential treatment. Only a general assertion was made without details, and the material did not establish unequal treatment. A bare allegation was insufficient to dislodge the demand.

Conclusion: No discriminatory treatment was proved.

Issue (v): whether the addition of 10% profit in valuation was permissible.

Analysis: The valuation addition was made under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, which permits inclusion of normal profit where value cannot otherwise be determined under the relevant rules. The challenge did not displace that basis.

Conclusion: The 10% profit addition in valuation was upheld.

Final Conclusion: The demand of excise duty was sustained in all material respects and the assessee's challenge failed on limitation, liability, classification, discrimination and valuation.

Ratio Decidendi: Where later trade notices remove doubt and the assessee fails to disclose manufacture and installation of excisable goods, suppression is established and the extended period of limitation may be invoked; further, bolted equipment capable of removal is not immovable property for excise purposes, and valuation may include normal profit under the prescribed rules.

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