Site-fabricated steel tanks treated as immovable property, defeating excise duty and penalty under settled precedent.

Site-fabricated steel storage tanks that come into existence piece by piece while attached to the earth were treated as immovable property and not liable to central excise duty under the applicable Board circular and settled Tribunal precedent. The analysis also noted that the impugned order failed to address defence evidence on procurement and supply of steel sheets to the site, weakening the duty demand and associated penalty. On that basis, the duty could not be confirmed and the penalty could not survive, making the order unsustainable.

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Issues: Whether duty and penalty were sustainable on steel storage tanks fabricated at the client's site, in the light of the Board's circular and the evidence showing site fabrication, and whether the impugned order could stand when it ignored material defence evidence.

Analysis: The applicable Board circular stated that where a tank comes into existence piece by piece while attached to the earth, it is part of immovable property and not liable to central excise duty. The tanks in question were large site-fabricated tanks, and the reasoning accepted that such tanks necessarily came into existence at site in an attached condition. The order under challenge also failed to deal with the defence evidence regarding procurement and supply of steel sheets to the site, and could not override the binding departmental circular or the settled position of law on similar site-fabricated structures. The issue was treated as no longer res integra in view of earlier Tribunal decisions relied upon.

Conclusion: Duty could not be confirmed on the tanks and the penalty could not survive. The impugned order was unsustainable.

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