Site-erected lifts as immovable property: installed lifts were not excisable goods, and escalation charges were excluded from value.

Lifts assembled and installed at a customer's site were treated as immovable property, because they came into existence only after erection, fixing of components, wiring, alignment, testing and commissioning. On that basis, the installed lift was not regarded as excisable goods, since the finished article did not exist as movable goods at the stage of clearance and became part of the building. The same reasoning excluded proportionate escalation charges from the assessable value, because valuation could not be enlarged for a completed installed lift that was not dutiable in its erected form.

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Issues: (i) Whether lifts assembled and installed at the customer's site become immovable property and therefore are not excisable goods under the tariff heading claimed by Revenue. (ii) Whether, once the lift is held to be immovable property, proportionate escalation charges can be included in the assessable value.

Issue (i): Whether lifts assembled and installed at the customer's site become immovable property and therefore are not excisable goods under the tariff heading claimed by Revenue.

Analysis: The installed lift was found to emerge only after extensive site work, including fixing of components to the building, electrical wiring, alignment, testing, and commissioning. The completed lift was held to function as part of the building and not as a movable article. Note 4 of Section XVI did not assist Revenue because the components did not attain the character of a finished lift as goods at the stage of clearance. The reasoning was supported by the principle that an article which comes into existence only upon complete erection and becomes part of immovable property is not excisable as goods.

Conclusion: The lift, as erected and commissioned at site, is not excisable goods; Revenue's classification challenge fails.

Issue (ii): Whether, once the lift is held to be immovable property, proportionate escalation charges can be included in the assessable value.

Analysis: Since the completed lift was treated as immovable property and not excisable goods, valuation could not proceed on the basis of construction cost with added escalation charges for the final installed lift. The value could not be enlarged by including such post-installation elements in the assessable value of something that was not dutiable in its completed erected form.

Conclusion: The escalation charges were not includible in the assessable value; the assessee succeeds on valuation.

Final Conclusion: The demand on the completed lift was rejected, while the valuation addition was set aside, resulting in partial relief to the assessee and dismissal of Revenue's challenge.

Ratio Decidendi: Where an article comes into existence only after erection, installation, testing, and commissioning at site and becomes part of immovable property, it is not goods liable to central excise duty in its installed form.

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