Permanently embedded storage tanks were treated as non-movable goods, so central excise duty and penalty could not survive.

Storage tanks fabricated and erected at site, fixed on concrete foundations and permanently embedded in earth, were treated as non-movable and therefore not excisable goods. The Tribunal reasoned that items which cannot be removed except by total dismantling lack the character of movable marketable goods required for central excise duty. It also rejected the distinction drawn between larger and smaller tanks because all were made by the same process and shared the same permanent character. On that basis, the duty demand was held unsustainable and the connected personal penalty on the Managing Director also could not survive.

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Issues: Whether the storage tanks fabricated and erected at site, and permanently embedded to earth, were excisable goods liable to central excise duty and whether the personal penalty imposed on the Managing Director could stand.

Analysis: The tanks were fabricated at the site, installed on concrete foundations, and anchored permanently. On the facts recorded, they could not be removed or brought to market as such and could be taken out only after total dismantling. The distinction drawn by the adjudicating authority between larger tanks and two smaller tanks was not sustainable because all the tanks were made by the same process and shared the same character of permanence. Goods so embedded to earth lack the character of movable goods and are not liable to duty as excisable goods on the reasoning applied by the Tribunal.

Conclusion: The demand of duty on the tanks was unsustainable and the connected penalty also could not survive.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Goods fabricated and permanently embedded at site, which cannot be removed except by dismantling, are not movable excisable goods liable to central excise duty.

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