Judgment:
1. All the six appeals are being disposed of by a common order as the issue involved is the same in all of them. The detail of the duty demanded and penalty imposed vide various orders pased by the Commissioner of Central Excise, Bhubaneswar I are as under :-NAME OF THE PARTY DUTY PENALTYM/S. WESTERN INDIA MACHINERY CO. 33,21,425.25 33,30,000.00(S.P.16/2000(E/RV-11/2000)M/S. WESTERN INDIA MACHINERY CO. 3,19,669.41 3,20,000.00(S.P.NO.18/2000(E/RV-13/2000)M/S. WESTERN INDIA MACHINERY CO. 5,69,012.31 5,70,000.00(S.P.NO.20/2000(E/RV-15/2000)M/S. VINEET ELECTRICAL INDUSTRIES (P) LTD. 23,31,110.89 23,35,000.00(S.P.NO.15/2000(E/RV-10/2000)M/S. VINEET ELECTRICAL INDUSTRIES (P) LTD. 6,89,324.09 6,90,000.00(S.P.NO.19/2000(E/RV-14/2000)M/S. VINEET ELECTRICAL INDUSTRIES (P) LTD. 3,23,652.68 3,24,000.00(S.P.NO.17/2000(E/RV-12/2000) 2. The ground on which the duties have been confirmed against the appellants is that they are engaged in the manufacture of D.G.Sets, by rejecting the appellants' stand that errection of D.G.Sets at their customers' site does not result in coming into existence of any excisable goods.
3. After hearing Shri S.K.Bagaria, ld.Advocate for the appellants and Shri R.K.Roy, ld.JDR for the Revenue, we find that the crux of the main issue in all the six appeals is whether assembly of Diesel Engines and alterators on a base frame at the site of installation to make the complete Diesel Generating Set ready for use and then attached/fixed to some concrete platform so as to ensure its vibration free operation, would amount to "manufacture". The appellants pleaded before the Commissioner that by the process of errection and installation at site, the D.G.Sets have become immovable property and as such do not amount to manufacture of excisable goods. This plea was rejected by him with the following observations of the impugned order :- " The stand taken by the WIMCO/VELL is that at the site where the D.G.Sets is to be assembled, a concrete foundation is prepared on which the base frame of cast iron or M.S. Steel is fixed. On the base frame, the generator and the engine is mounted on a permanent basis. The engine of the D.G.Sets rotates 90 thousand times in an hour. The generator cannot run without proper grouting and strong permanent fixed base which makes the entire D.G.Sets into an immovable property. Furthermore, it is their contention that as per the Indian Electricity Act, earthing is compulsory in each case by making provision for pipes and iron wires to the level of 15 ft./20 ft. underground. D.G.Sets cannot be made ready for use unless pipes and wires are grouted to the earth to avoid electric shock.
Consequent upon installation of the D.G.Set on the concrete base and wires & pipes upto 15 ft./20 ft. underneath the earth, the D.G.Set virtually becomes an immovable property.
As against the above, I find that amongst others, the three main components i.e. engine, alternator and the base frame are set to the site for installation of the D.G.frame. Since the engine of the D.G.Set rotates at very fast speed and the engine and the alternator are heavy items sometimes weighing tons they are to be mounted on the Base Frame placed on a concrete foundation with proper grouting arrangements to hold the d.G.Set assembly firmly. Thus, the diesel generating set mounted on the base needs to be fastened with nuts and bolts or any other suitable device and thereby gets attached/fixed to the concrete platform so that during the high speed rotation of the engine of D.G.Sets, the operation becomes vibration free. Thus, the assembly of the D.G.Sets involves mounting of the various component parts on the base frame which is strongly fastened through grouting device with concrete foundation prepared for the said purpose. From this, I find that the D.G.Set is very much a movable property. Since the components of the D.G.Sets are fastened to the concrete platform through the grouted bolts for the purpose of vibration free operation, the assembled D.G.Set can be removed at any time, for assembly at the site continues tobe a movable property because it is capable of being shifted from place to place after unscrewing/unbolting of the assembled components from the concrete foundation. Such D.G.Set is capable of being bought and sold in the market." 4. We find that an identical issue cropped up before the Hon'ble Supreme Court in the case of Triveni Engineering & Industries Ltd. Vs.
Commissioner of Central Excise reported in 2000 (40) RLT 1 (S.C.) wherein it was held that installation and erection of turbo alternator on the platform constructed on the land would be immovable property which does not pass the test of mobility and marketability and as such cannot be considered as excisable goods. We find that their Lordship in the said case in para 20 have observed that marketability test requires that the goods 'as such' should be in a position to be taken to the market and sold and from the above findings it follows that to take it to the market the turbo alternator has to be separated into its components - turbine and the other alternator but then it would not remain turbo alternator. Int he instant case also, we find that for becoming the complete D.G.Sets alternator and engine is mounted on a permanent basis on a base frame, which is placed on a concrete foundation. As in the case of Triveni Engineering, such D.G.Sets cannot be taken to the mart 'as such' and have to be separated into its components which would be engine and alternator but then the same would stop to be a diesel generator set. This position becomes clear from the observations of the adjudicating authority as reproduced above.
5. Applying the ratio of the Hon'ble Supreme Court in the case of Triveni Engineering referred (supra), we hold that the activities undertaken by the appellants will not result in the manufacture of D.G.Sets which can be considered as leviable to duty of excise on account of its being fixed to the earth. Accordingly, we set aside the impugned order and allow all the appeals with consequential relief to the appellants.
6. As the appeals have been allowed on merits, alternate plea of limitation as raised by the appellants, is not being considered.