2005 (10) TMI 164 - AT - Central Excise

Tribunal overturns Commissioner's decision on excisability of 'Terminal Automation System'

The Tribunal allowed the appeal, overturning the Commissioner's decision on the excisability and classification of the 'Terminal Automation System (TAS)'. ... Pipeline project Issues:Excisability and classification of 'Terminal Automation System (TAS)'Analysis:1. Excisability and classification of 'Terminal Automation System (TAS)':The case involved an appeal against the Order-in-Original passed by the Commissioner of Central Excise and Customs, Visakhapatnam regarding the excisability and classification of the 'Terminal Automation System (TAS)'. The Commissioner held that the TAS is excisable and classifiable under Heading 84.71 of the Central Excise Tariff, demanding duty, penalty, and interest. The appellants challenged these findings, arguing that the TAS should not be considered excisable. They presented evidence to support their claim that the entire system was a 'turnkey project' and immovable property. The appellants emphasized that the TAS was custom-built, embedded to earth, and specifically designed for the buyer, making it unsuitable for use elsewhere. They cited relevant case laws and circulars to support their argument, highlighting that projects like the TAS should not be subject to excise duty. The Tribunal considered the evidence, including expert opinions and descriptions of the TAS's functional and operational requirements. After careful review, the Tribunal concluded that the TAS indeed constituted a 'turnkey project' and immovable property, aligning with the Board Circular dated 15-1-2002. Therefore, the appeal of the appellants was allowed, overturning the Commissioner's decision.This detailed analysis of the legal judgment highlights the key issues surrounding the excisability and classification of the 'Terminal Automation System (TAS)'. The arguments presented by the appellants, supported by evidence, case laws, and circulars, were thoroughly examined by the Tribunal. Ultimately, the Tribunal's decision was based on the specific characteristics of the TAS, determining it to be a 'turnkey project' and immovable property, thereby impacting its excisability under the Central Excise Tariff.