Excisability of factory-installed cranes and exclusion of erection charges from assessable value under central excise law

Electric overhead cranes fabricated and installed in a factory were treated as movable excisable goods and not as immovable structures, so the exemption claimed under Notification No. 118/75 was unavailable. The Tribunal noted that similar cranes had been regarded as capital goods used in production, supporting their treatment within excise control. On valuation, labour, erection and commissioning charges were not fully includible in assessable value, and duty had to be recomputed after excluding those elements. The matter was remitted for limited reassessment on valuation while the excisability and exemption issue was decided against the assessee.

---

---

Issues: (i) Whether electric overhead cranes fabricated and installed in the factory were excisable goods and outside the scope of the exemption claimed under Notification No. 118/75; (ii) whether labour, erection and commissioning charges could be included in the assessable value for determining duty.

Issue (i): Whether electric overhead cranes fabricated and installed in the factory were excisable goods and outside the scope of the exemption claimed under Notification No. 118/75.

Analysis: The cranes were treated as movable goods for central excise purposes. The cited precedent did not assist the assessee on the question of excisability. The Tribunal also noted that cranes of this nature had been regarded as eligible capital goods in decisions under Rule 57Q when used in the production process, which supported the view that such machinery could be brought within excise control rather than treated as immovable structures.

Conclusion: The cranes were held to be excisable goods, and the exemption was held to be unavailable.

Issue (ii): Whether labour, erection and commissioning charges could be included in the assessable value for determining duty.

Analysis: The Tribunal accepted that the valuation had proceeded on an inflated basis because charges relating to erection and commissioning had been added. Since such charges were held in the cited line of authority to be excludible for valuation purposes, the duty computation required reconsideration after removing those elements.

Conclusion: The assessable value was directed to be redetermined by excluding erection and commissioning charges.

Final Conclusion: The assessee failed on the exemption and excisability question, but obtained relief on valuation, and the matter was remitted for limited reassessment of duty.

Ratio Decidendi: Electric overhead cranes used in the manufacturing set-up are excisable goods, but assessable value must exclude erection and commissioning charges where such charges are not legally includible.

---