Movable and marketable plant assemblies failed excise test; limitation and penalties also fell for lack of suppression proof.

An assembled plant is not excisable merely because it exists as a large installation; reliable technical evidence is required to show that it is movable and marketable as such. On the record, panchnama and photographs were insufficient to prove that the plant assemblies could be removed intact without destroying their identity, so the duty demand on that basis failed. The extended period of limitation was also unavailable because the assessee had disclosed that it was setting up a separate new industrial unit, and there was no sustainable proof of suppression or intent to evade. The demand was therefore time-barred and the penalties could not survive.

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Issues: (i) whether the plant assemblies were excisable goods capable of being treated as movable and marketable; (ii) whether the demand was barred by limitation and the penalties could survive.

Issue (i): whether the plant assemblies were excisable goods capable of being treated as movable and marketable.

Analysis: The only material relied upon to hold the plants movable was the panchnama and the accompanying photographs. The record did not establish, with reliable technical evidence, that the large and complex plant assemblies could be removed intact from their foundations and relocated without destroying their identity. The evidence was insufficient to answer the test of marketability as applied to an assembled plant. The reasoning was reinforced by the principle that goods must be capable of being taken to market as such, not after being reduced into components.

Conclusion: The plant assemblies were not proved to be movable excisable goods; the duty demand on that basis could not stand.

Issue (ii): whether the demand was barred by limitation and the penalties could survive.

Analysis: The notice invoking the extended period was unsupported because the assessee had informed the department that it was setting up a separate new industrial unit. In the absence of a sustainable foundation for alleging suppression or intent to evade, the extended period was unavailable. Since the duty demand itself failed, the consequential penalties under the cited provisions also could not survive.

Conclusion: The demand was hit by limitation and the penalties were unsustainable.

Final Conclusion: The impugned order was set aside in full and the appeals succeeded.

Ratio Decidendi: For excise liability, an assembled plant must be shown by reliable evidence to be movable and marketable as such; where the extended period is invoked without proof of suppression or intent to evade, the demand and consequential penalties fail.

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