Site-erected compactor storage systems failed marketability test and were treated as immovable, not excisable goods.

Compactor storage systems cleared in knocked-down form and erected at site were treated as non-dutiable where installation required civil work, rail laying, grouting, welding, fabrication and final fixing. The system emerged only after site erection as a permanent fixture, so it was not capable of sale in the condition in which it left the factory and failed the marketability test for goods. On that basis, the tariff rule for incomplete or unfinished goods could not be applied, and the duty demand was held unsustainable.

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Issues: Whether the compactor storage system cleared in kit/CKD form and erected at the customer's site is excisable goods liable to central excise duty, or whether it comes into existence only as immovable property and is therefore not dutiable.

Analysis: The storage system was not merely assembled by fastening ready-made goods; the record showed that its installation required civil work, laying and grouting of rails, welding, fabrication and final fixing at site. The system became a permanent fixture and was not capable of being sold as such in the condition in which it left the factory. In these circumstances, the system did not answer the test of marketability as goods. Once the article came into existence only after site erection as immovable property, the tariff rule treating incomplete or unfinished goods as having the essential character of the finished goods could not be invoked.

Conclusion: The storage system was not excisable goods in the condition in which it was cleared from the factory, and the duty demand was unsustainable.

Final Conclusion: The order confirming duty and penalty was set aside and the appeal succeeded.

Ratio Decidendi: An article cleared in knocked-down form is not dutiable where, after site erection involving civil work and fabrication, it emerges only as immovable property and fails the test of marketability as goods.

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