Marketability test for site-assembled air-conditioning plants: excise duty fails absent proof they can be sold as such.

Central air-conditioning plants assembled and installed at customers' premises on a turnkey basis were held not marketable because they came into existence only through site assembly, could not be removed and sold as such, and would lose their identity on dismantling. Mere tariff classification did not establish excisability, and the department failed to produce independent evidence of marketability. The article also noted that the Board treated an air-conditioning plant as a system distinct from a unit, reinforcing that the system as a whole was not excisable. Accordingly, the plants were not liable to central excise duty.

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Issues: Whether the central air-conditioning plants erected and installed at customers' premises were marketable goods and, consequently, excisable to central excise duty.

Analysis: The plant came into existence only by assembly and installation of various components at site on a turnkey basis. The controlling test was whether the goods could be taken to the market and sold as such. On the facts found, the plant could not be removed and marketed in its assembled form; dismantling would destroy essential components and what remained would only be parts, not the plant as a whole. The department did not establish independent cogent evidence of marketability, and mere classification under the tariff did not determine excisability. The Board's circular also treated an air-conditioning plant as a system, distinct from a unit, and indicated that the system as a whole was not excisable.

Conclusion: The central air-conditioning plants were not marketable and were not liable to central excise duty.

Ratio Decidendi: Goods assembled and installed at site are not excisable unless the department proves that the assembled article, as such, is capable of being taken to market and sold; tariff classification alone does not satisfy the marketability requirement.

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