Site-erected steel towers lacked marketability and escaped excise duty, while workshop-made towers remained dutiable.

Steel towers assembled piece by piece on RCC foundations at site were treated as embedded to the earth and therefore lacked the marketability required for excisable goods; excise duty could not be sustained on those 10 site-erected towers. The two towers admittedly fabricated in the workshop at Delhi remained dutiable, but eligibility for exemption under Notification No. 175/86-C.E. was left for reconsideration by the adjudicating authority. The key distinction was between site assembly resulting in immovable, non-marketable structures and workshop manufacture of movable goods subject to central excise.

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Issues: Whether steel towers fabricated and erected piece by piece on RCC foundations at site were excisable goods liable to central excise duty, and whether the benefit of Notification No. 175/86-C.E. was available.

Analysis: The Department did not adduce material to show that the towers, other than the two admittedly fabricated in the workshop at Delhi, were first manufactured at Delhi and then transported for erection. The towers erected at site were assembled piece by piece on concrete foundations and became embedded to the earth, so they lacked marketability as movable goods. As excise duty is attracted only when the product is shown to be excisable and marketable, duty could not be sustained on the 10 site-erected towers. In respect of the two towers admitted to have been manufactured in the workshop, duty liability remained, but the question of exemption under Notification No. 175/86-C.E. required examination by the adjudicating authority.

Conclusion: Excise duty was not leviable on the 10 towers erected at site, while duty was leviable on the 2 towers admittedly manufactured in the workshop; the exemption notification issue was remanded for reconsideration.

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