Excisability of goods sent for integration at site.

[sreemannarayana B]

As per 37B order No: 58/1/2002 - CX, "Integrated plants/machines, as a whole, may or may not be ‘goods’. For example, plants for transportation of material (such as handling plants) are actually a system or a net-work of machines. The system comes into being upon assembly of its component . In such a situation there is no manufacture of "goods" as it is only a case of assembly of manufactured goods into a system. This cannot be compared to a fabrication where a group of machines themselves may be combined to constitute a new machine which has its own identity/marketability and is dutiable ( e.g. a paper making machine assembled at site and fixed to the earth only for the purpose of ensuring vibration free movement).

Therefore, if i send various duty paid items (bought out items not manufactured by us) to site for integration i.e connectivity between systems by plugging, will it be exempted from payment of Excise duty as per the 37B order vide para no:IV ?

 

AI Summary

Excisability of integrated plants: dutiable when capable of being sold or shifted without dismantling at site.
Excisability of site assembled machinery depends on whether the assembled plant is capable of being sold or shifted without dismantling. If it can be marketed or removed intact, Rule 2(a) applies and the machinery is excisable even if transported dismantled; if removal necessarily requires dismantling into component parts it is immovable and not excisable. Turnkey project installations are generally not treated as excisable as a whole, though constituent components remain dutiable.