Excisable goods classification upheld for re-erectable signages, with extended limitation sustained and overlapping penalty deleted.

Signages assembled, dismantled, transported and re-erected without losing identity were treated as excisable goods, not immovable property, even though fixed to concrete foundations at site, so central excise duty was payable. Suppression was found where manufacture, supply, erection and commissioning were carried on on a large scale without intimation to the department, supporting invocation of the extended limitation period. The assessee's penalty under Section 11AC was sustained in view of the confirmed duty demand and suppression, but the overlapping penalty under Rule 173Q was deleted. The Managing Director's penalty was upheld in principle, but reduced as excessive.

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Issues: (i) Whether the signages were excisable goods or immovable property and therefore liable to central excise duty; (ii) Whether the extended period of limitation was available on the ground of suppression of facts; (iii) Whether the penalties imposed on the assessee and its Managing Director were sustainable.

Issue (i): Whether the signages were excisable goods or immovable property and therefore liable to central excise duty.

Analysis: The signages were found to be assembled at the assessee's premises, inspected as complete units, dismantled for transport, and re-erected at IOC outlets. They were capable of being assembled, dismantled, transported, and re-installed without losing their identity. The fact that they were fixed to a concrete foundation at site did not make them immovable property. The distinguishing authorities relied on by the assessee were held inapplicable on their facts.

Conclusion: The signages were held to be excisable goods and not immovable property, and duty was payable.

Issue (ii): Whether the extended period of limitation was available on the ground of suppression of facts.

Analysis: The assessee carried on manufacture, supply, erection, and commissioning of the signages on a large scale without intimating the activity to the department. The record showed documentary evidence of factory assembly, inspection, and clearance, and no acceptable explanation was found for the failure to disclose the activity. This supported invocation of the larger limitation period.

Conclusion: The extended period of limitation was correctly invoked against the assessee.

Issue (iii): Whether the penalties imposed on the assessee and its Managing Director were sustainable.

Analysis: The penalty on the assessee under Section 11AC was upheld in view of the confirmed duty demand and suppression. However, the additional penalty under Rule 173Q was found unnecessary in light of the penalty already imposed under Section 11AC. The Managing Director was held responsible for dealing with and removing excisable goods without payment of duty, but the quantum of penalty was reduced as excessive.

Conclusion: The penalty on the assessee under Section 11AC was sustained, the additional penalty on the assessee was set aside, and the Managing Director's penalty was reduced to Rs. 2,00,000.

Final Conclusion: The duty demand and limitation finding were sustained, but the penalty structure was modified by deleting the overlapping penalty and reducing the individual penalty, resulting in only partial relief to the appellants.

Ratio Decidendi: An item that can be assembled, dismantled, transported, and re-erected without losing its identity remains excisable goods even if fixed to the earth at site; concealment of such manufacture and clearance justifies the extended limitation period and statutory penalty.

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