Erection of turbo alternator sets at site was treated as immovable property, excluding excise duty and interest on advances.

Installation or erection of turbo alternator sets at site was treated as resulting in an immovable structure, so the assembled equipment did not amount to excisable goods under Heading 85.02. The value of bought-out items was not includible in assessable value, while valuation of individual clearances from factory to site was left for fresh determination by the adjudicating authority in accordance with law after giving the assessee an opportunity. Duty on interest on advances was also not sustained, as the governing Supreme Court precedent was applied. The appeals were thus disposed of on those terms, with the valuation issue remitted.

---

---

Issues: (i) whether installation or erection of turbo alternator sets at site amounted to manufacture and resulted in excisable goods under Heading 85.02 of the Central Excise Tariff Act, 1985; (ii) whether the value of bought-out items and the valuation of individual clearances from factory to site formed part of the assessable value; and (iii) whether duty was leviable on interest on advances.

Issue (i): whether installation or erection of turbo alternator sets at site amounted to manufacture and resulted in excisable goods under Heading 85.02 of the Central Excise Tariff Act, 1985.

Analysis: The disputed supply related to turbo generator sets erected at site. The ruling relied on the Supreme Court's view that such installation or erection on a specially constructed platform does not amount to goods embedded as part of a common base. On that reasoning, the assembled turbo alternator was treated as immovable property and not as excisable goods.

Conclusion: The issue was decided in favour of the assessee. Installation or erection of the turbo alternator was held not to be excisable goods.

Issue (ii): whether the value of bought-out items and the valuation of individual clearances from factory to site formed part of the assessable value.

Analysis: The parties accepted that the value of bought-out items could not be added to the assessable value. As to the individual clearances, the matter had already been remanded for fresh determination of value in accordance with law after giving the assessee an opportunity. The issue was therefore not finally determined on merits in this order beyond the direction for reconsideration.

Conclusion: The issue was left for fresh consideration by the adjudicating authority in accordance with law.

Issue (iii): whether duty was leviable on interest on advances.

Analysis: The order treated the question as covered by the Supreme Court's decision holding that interest on advances was not includible for the purpose in dispute. The earlier binding ruling was applied without further dispute.

Conclusion: The issue was decided in favour of the assessee and duty on interest on advances was not sustained.

Final Conclusion: The appeals succeeded on the principal question of excisability and on interest on advances, while the valuation dispute relating to individual clearances was remitted for fresh decision, and the proceedings were concluded by disposal of the appeals in those terms.

Ratio Decidendi: Erection or installation of a turbo alternator at site, resulting in an immovable structure, does not amount to excisable goods; interest on advances is not includible where the governing precedent so holds.

---