Site-erected steel tank not excisable goods; absence of suppression barred extended limitation and defeated the demand.

A site-erected steel storage tank fixed to a cement concrete foundation was treated as an immovable installation, not a marketable movable article, so its fabrication and erection did not amount to manufacture of excisable goods and it was not classifiable as goods under Chapter sub-heading 7309.00. In the absence of material showing suppression with intent to evade duty, the extended limitation period under Section 11A(1) could not be invoked, and the show cause notice and demand were time-barred to that extent. The demand and penalty were therefore not sustainable.

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Issues: (i) whether the show cause notice was barred by limitation and the extended period could be invoked; (ii) whether fabrication and erection of the steel storage tank amounted to manufacture of excisable goods and whether the tank was classifiable as goods under Chapter sub-heading 7309.00.

Issue (i): whether the show cause notice was barred by limitation and the extended period could be invoked.

Analysis: The demand was founded on the premise that the steel storage tank attracted duty, but the facts showed that the structure was erected at site on a turnkey basis and the assessee could reasonably believe that such site erection did not amount to manufacture of excisable goods. In the absence of material showing suppression with intent to evade duty, the extended period under Section 11A(1) could not be sustained.

Conclusion: The notice and demand were held to be time-barred insofar as the extended period was invoked.

Issue (ii): whether fabrication and erection of the steel storage tank amounted to manufacture of excisable goods and whether the tank was classifiable as goods under Chapter sub-heading 7309.00.

Analysis: The tank was assembled and erected on a cement concrete foundation permanently attached to the earth. Its components were brought and welded together at site, but the completed structure was not a marketable movable article and was intended as an immovable installation from the outset. A structure so embedded in the foundation and attached to earth does not acquire the character of goods merely because parts were assembled in stages.

Conclusion: The steel storage tank was held not to be goods, and its fabrication and erection did not amount to manufacture for excise purposes.

Final Conclusion: The demand and penalty could not be sustained, and the appeal succeeded with consequential relief.

Ratio Decidendi: A site-erected structure permanently attached to an immovable foundation and not intended or capable of ordinary market movement is not excisable goods, and absence of suppression bars invocation of the extended limitation period.

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