The Supreme Court in the Damodar Ropeways case, reported in 2003 (151) ELT 3 SC, said the ropeway being erected was an immovable property and not chargeable to the central excise duty.
The judgment has come as a relief to the capital goods industry. The revenue department had been issuing hundreds of crores of rupees demand for excise duty under the notion that such things were excisable.
To attract excise duty, the goods manufactured must be marketable. If they are embedded to the ground and immovable, they are not marketable and would not have to pay excise duty. Plants, like paper units and power plants, are considered immovable property and not marketable being embedded on earth. All the judgements of the Supreme Court and tribunals are on this line only.
In the Gujarat Machinery vs CCE case, 1983 ELT 825(T), and the Chemical Vessels Fabricators Ltd case, 1982ELT 92, chemical plants embedded to the ground were held as an immovable property and thus not excisable.
In the Mittal Engineering Works case, 1996 (88) 622 (SC), mono-vertical crystallises attached to the earth were adjudged as immovable property by the Supreme Court.
In the Quality Steel Tubes vs CCE case, 1995(75) 17(SC), steel tube mill was held as goods attached to earth and so an immovable property by the Supreme Court.
There are similar judgements about pulses mills, 1993 ELT 2390(T), lifts, elevators, escalators, weighing machine and overhead travelling cranes.
Various courts and tribunals have taken the view that plants and machinery embedded to the ground are immovable, not marketable and so not excisable. This was the settled law.
Without referring to these cases, the apex court unsettled this proposition in the Sirpur Paper Mills vs CCE case, 1998(97) ELT 3(SC), by holding that paper making machine was not
