Site-fabricated ladders and staircases treated as immovable property, so no excise duty could be sustained.

Site-fabricated ladders and staircases were held to have been manufactured by independent contractors acting on a principal-to-principal basis, because the contracts fixed specifications, quantities and rates, and the contractors used their own tools and bore their own liabilities. The items themselves were treated as immovable property, as they were tailor-made, permanently grouted and fastened, and formed integral parts of the mill structures. Since such embedded structures lacked the character of marketable movable goods, they were not excisable goods. On that basis, the duty demand, penalty and confiscation could not be sustained.

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Issues: (i) Whether the contractors, and not the appellants, were the manufacturers of the ladders and staircases fabricated at site; and (ii) whether the ladders and staircases so fabricated were excisable goods or immovable property.

Issue (i): Whether the contractors, and not the appellants, were the manufacturers of the ladders and staircases fabricated at site.

Analysis: The work orders showed that the fabrication work was entrusted to independent contractors on a principal-to-principal basis, with rates, quantities and specifications fixed in the contracts. The contractors used their own tools, tackles and equipment, and bore their own statutory and contractual liabilities, which negatived the relationship of hired labour. On the settled principle that the supplier of materials is not, by that fact alone, the manufacturer, the real persons who brought the goods into existence were the contractors.

Conclusion: The contractors were the manufacturers, not the appellants.

Issue (ii): Whether the ladders and staircases so fabricated were excisable goods or immovable property.

Analysis: The ladders and staircases were tailor-made for use in the mills, permanently fixed by grouting, fastening and similar methods, and formed integral parts of the building structures. The relevant exemption covered structures and parts of structures fabricated at site for use in construction work, and the goods answered that description. The test of marketability also was not satisfied for such non-prefabricated, permanently embedded items. Goods that become integral and immovable parts of a building are not exigible as movable manufactured goods.

Conclusion: The ladders and staircases were immovable property and not excisable goods.

Final Conclusion: The duty demand, penalty and confiscation could not be sustained, and the appeal was allowed.

Ratio Decidendi: Where site-fabricated structures or parts thereof are erected on a principal-to-principal basis and become permanently embedded as integral parts of a building, they are not manufactured excisable goods unless they are shown to be marketable movable goods.

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