Tribunal rules caisson gate not excisable, setting aside excise duty demand

The Tribunal ruled in favor of the appellants in a case concerning the excisability of a caisson gate of a dry dock. The Tribunal emphasized that the caisson gate, being an integral part of the dry dock and not capable of being marketed independently, should not be considered excisable goods. Citing precedents and the marketability test, the Tribunal found that the caisson gate did not meet the criteria of being marketable or possessing a new identity for excisability. As such, the Tribunal set aside the demand for excise duty on the caisson gate, allowing the appeal in favor of the appellants.

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Issues involved:
Excisability of caisson gate of dry dock.

Analysis:
The appeal revolved around the excisability of the caisson gate of a dry dock. The appellants contended that the caisson gate, being an integral part of the dry dock and immovable property, should not be considered excisable goods. They argued that the caisson gate is not marketable independently and is constructed on-site as part of the dry dock. The appellants referenced a previous decision by the Commissioner of Central Excise, Visakhapatnam, which dropped a similar demand for excise duty on the caisson gate, stating that such fixed structures are not marketable goods.

The Revenue, on the other hand, argued that since various firms were involved in constructing caisson gates, they should be considered marketable goods. However, the Tribunal highlighted that the demand was only for the caisson gate, not the entire dry dock. Notably, the Tribunal referenced a judgment by the Hon'ble Karnataka High Court, which held that certain structures, like hydraulic gates of a dam, are not excisable goods if they are not marketable or capable of being marketed as standalone items.

The Tribunal emphasized the marketability test established by the Hon'ble Supreme Court, which requires goods to be capable of being taken to the market and sold to be considered excisable. In this case, the Tribunal found no evidence presented by the Revenue to demonstrate that caisson gates were being marketed as standalone items. Additionally, a Circular issued by the Central Board of Excise and Customs emphasized that for goods manufactured on-site to be excisable, they must possess a new identity and marketability. As the caisson gate did not meet the criteria of being marketable or capable of being marketed independently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants.

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