Site-erected boilers and excisability: once attached to earth and no longer marketable, they are not goods for duty.

Boilers assembled and erected at a customer's site from duty-paid CKD/SKD components were treated as immovable property after installation on foundation and attachment to earth. Applying the settled excisability test, the item must remain movable and marketable to qualify as goods; once the erected boiler became part of the site structure, it no longer satisfied those twin requirements. On that basis, the duty demand, penalty, and extended limitation could not be sustained.

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Issues: Whether boilers erected at the customer's site in CKD/SKD condition, after assembly of duty-paid components, became immovable property and therefore were not excisable goods liable to duty, penalty, and extended limitation.

Analysis: The Department treated the site-erected boiler as a fresh excisable product and invoked the extended period and penalties. The appellants showed that the components had already suffered duty when cleared from the factory and that the final boiler came into existence only after erection at site. Applying the settled test of excisability, the deciding factor was whether the item, after erection, remained movable and marketable. The record did not establish that the erected boiler continued to be goods capable of being bought and sold as such; rather, it had been installed on foundation and formed part of the site structure. The Board circular and the cited precedents were treated as supporting the principle that plant and machinery erected and attached to earth do not satisfy the twin tests of goods and marketability.

Conclusion: The erected boiler was held to be an immovable property and not excisable goods; the duty demand and penalties could not be sustained.

Ratio Decidendi: An article assembled and erected at site is not liable to central excise duty if, after erection, it is no longer movable and marketable and has become an immovable property.

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