Immovable plant and site-erected systems are not excisable goods; related duty, interest and penalty cannot survive.

Spray painting systems and booths assembled at customers' premises, fixed to the earth by bolting and concreting, were held not to be excisable goods because they had become immovable property and could not be dismantled or moved without damage. The Tribunal applied the marketability test and distinguished removable machinery from structures permanently attached to the site. As the basic levy failed, the related demand for interest and penalty also could not survive; the alleged suppression and extended period were rejected on the facts. The appeals were allowed and the order confirming duty, interest and penalties was set aside.

---

---

Issues: (i) Whether the spray painting systems and booths erected at customers' premises, being fixed to the earth and incapable of removal without damage, were excisable goods under the Central Excise law. (ii) Whether duty demand, interest and penalty could be sustained on the basis of alleged suppression and the extended period.

Issue (i): Whether the spray painting systems and booths erected at customers' premises, being fixed to the earth and incapable of removal without damage, were excisable goods under the Central Excise law.

Analysis: The systems were supplied in parts and assembled, installed and commissioned at site. The record and photographs showed a large integrated structure fixed to the earth by bolts and concreting, with interlinked components that could not be dismantled and moved without damage. The governing test was whether the article was "goods" capable of being bought and sold in the market. A structure which becomes immovable property on erection does not answer that test, even if component parts are manufactured and brought to site. The facts were held to be distinguishable from cases where machinery remained removable after bolting to a foundation.

Conclusion: The spray painting systems and booths were not excisable goods; the demand of duty was unsustainable.

Issue (ii): Whether duty demand, interest and penalty could be sustained on the basis of alleged suppression and the extended period.

Analysis: Once the basic levy failed, the consequential demand for interest and penalty could not survive. The Tribunal also held that the department's approach to suppression was not acceptable on the facts, and that the clarification relied upon made the invocation of penalty under the penal provision erroneous. The extended-period demand and penal consequences were therefore set aside.

Conclusion: The demand for interest and penalty was not sustainable, and the invocation of the extended period failed.

Final Conclusion: The appeals succeeded and the impugned order confirming duty, interest and penalties was set aside.

Ratio Decidendi: A plant or system erected at site that becomes permanently attached to the earth and cannot be removed without damage is not "goods" for central excise purposes, and consequential duty, interest and penalty cannot be sustained.

---