Marketability test for excise: permanently embedded material handling system was not excisable because it was not marketable as such.

A mechanised material handling system permanently embedded to the earth was treated as immovable and incapable of being taken to market and sold in the form in which it came into existence. Applying the marketability test for excisability, the determining principle was that goods must be capable of being marketed as such before Central Excise duty can apply. On that basis, the system did not satisfy the test of marketable goods and was not liable to Central Excise duty; the revenue appeal failed.

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Issues: Whether the mechanised material handling system was movable and marketable goods liable to Central Excise duty.

Analysis: The system was found to be permanently embedded to the earth and could not be brought to the market and sold as such. Applying the marketability test, the Court relied on the principle that goods must be capable of being taken to the market in the form in which they come into existence and sold as such.

Conclusion: The mechanised material handling system was not liable to Central Excise duty, and the revenue appeal failed.

Ratio Decidendi: An article permanently embedded to earth and not capable of being marketed as such does not satisfy the marketability test for excisability.

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