Site-fabricated plant components and manufacturer status were assessed with remand on excisability and no manufacturer liability for NALCO.

Site-fabricated pot shells were examined for excisability on the basis of movability, marketability, and whether they formed an immovable part of plant assembled and installed at site. As the adjudication had not properly addressed these foundational questions, the duty finding could not stand and the matter was remanded for fresh consideration on excisability. On manufacturer liability, the contract required design, fabrication, testing, transportation and erection by the contractor, and a reimbursement clause for any later duty liability was insufficient to treat NALCO as a manufacturer through hired labour. On those facts, NALCO was not treated as the manufacturer.

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Issues: (i) Whether the Pot Shells fabricated and erected at site were excisable goods; (ii) Whether NALCO could be treated as a manufacturer of the Pot Shells under the excise law.

Issue (i): Whether the Pot Shells fabricated and erected at site were excisable goods

Analysis: The adjudication had not properly examined whether the Pot Shells were movable goods capable of being treated as marketable excisable goods, or whether they formed an immovable part of the plant assembled and installed at site. The Board's instructions issued under the statutory power for deciding excisability of plant and machinery assembled at site were also noticed as relevant guidance. In the absence of a proper inquiry into these foundational questions, the finding on duty liability could not be sustained.

Conclusion: The issue was remanded for fresh consideration, and no final finding on excisability was affirmed.

Issue (ii): Whether NALCO could be treated as a manufacturer of the Pot Shells under the excise law

Analysis: The definition of manufacturer was examined in the context of the contract between the parties. The contract required the contractor to undertake design, fabrication, testing, transportation and erection, which did not support the conclusion that NALCO had merely got the goods manufactured through hired labour. The contractual reference to reimbursement of duty if later levied was held insufficient to convert the arrangement into one of manufacture by NALCO under the statutory definition.

Conclusion: NALCO could not be treated as a manufacturer on the facts of the contract.

Final Conclusion: The duty demand was not finally upheld and the matter was sent back for a fresh decision on excisability, while NALCO was held not liable as manufacturer.

Ratio Decidendi: Site-fabricated plant components cannot be subjected to excise without a proper inquiry into movability and marketability, and a contract requiring design and erection does not by itself make the recipient a manufacturer through hired labour.

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