LexSIRPUR PAPER MILLS LTD. versus COLLECTOR OF CENTRAL EXCISE, HYDERABAD
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SIRPUR PAPER MILLS LTD. A v. COLLECTOR OF CENTRAL EXCISE, HYDERABAD DECEMBER 11, 1997 (SUHAS C. SEN AND K.T. THOMAS, JJ.] B Central Excises and Salt, 1944 : Section 3. Excise duty-Levy of-Paper-making machin~Erected Ill the assessee's factory by using duty paid componellts-Such machille pennanent- C ly embedded in earth--T1ibunal found that the said machine was attached to earth merely for operational efficiency, was not iriimovable, was saleable and liable to excise duty-Held : Such findings, being findings of fact wherein no matelial fact was overlooked or the decision perverse, upheld-Even otherwise such a machine, merely because it was pennanelltly embedded ill ea1th for better functioning, cannot become immovable prope1ty-Further, such a D machine can be sold by dismantling and reassembling at another site. Excise duty-Levy of-Test to dete1mine--Held: Whether the goods cm1 be sold in the market and not whether they are embedded in earth. Excise duf)r--Manuf actur~Paper-making machine erected by using valious components-Test to detennine--Held : Whether a new marketable commodity has emerged or not The appellant-assessee erected a paper-making machine in its fac- E tory by using duty paid components purchased from the market. The said F machine was embedded in a concrete base and permanently attached to the ground. The excise authority imposed duty on the said paper-making machine under Section 3 of the Central Excises and Salt Act, 1944. Being aggrieved the appellant-assessee filed a petition before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal G held that the machine was attached to earth for operational efficiency. The whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency and also for safety. The Tribunal further held that the paper- • making machine was saleable. Accordingly, the Tribunal dismissed the H 431 432 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R. A petition~ Hence this appeal. On behalf of the appellant it was contended that the machine was permanently attached to the ground and was really immovable; and that the machine could not ordinarily be sold in the market. B Dismissing the appeal, the Court HELD : 1. In view of the finding of fact by the Customs, Excise and Gold (Control) Appellate Tribunal that the paper-making machine was saleable it is not possible to hold that the machinery assembled and erected by the appellant at its factory site was immovable property as something C attached to earth like a building or a tree. The Tribunal has pointed out that it was for the operatio1ial efficiency of the machine that it was attached to earth. If the appellant wanted to sell the paper-making machine it could always remove it from its base and sell it. [ 434-A-C] D 2. The test is whether the paper-making machine can be sold in the market. The Tribunal has found as a fact that it can be sold. In view of that finding, it is not possible to uphold the contention of the appellant that the machine must be treatetl as a part of the immovable property of the com- pany. Just because plant and machinery are fixed in the earth for better functioning, it does not automatically become an immovable property. E [434-D-EJ 3. What the appellant has erected in its factory is a paper-making machine. It may have purchased various components to make the machine but nonetheless what has been produced is something quite different from the components that had been purchased. A new marketable commodity has F emerged as a result of the manufacturing activity of the appellant. [435-A-B] G 4. Marketability being a question of fart, there is no scope for inter- ference with the order passed by the Tribunal. It cannot be said that the Tribunal has overlooked any material fact or its decision is perverse. [435-C] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 527 of 1988. From the Judgment and Order dated 1.1.87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Order bearing No. H 1177 of 1982-BI in (Order No. 57/87-Bl). SIRPUR PAPER MILLS LTD. v. C.C. E. [SEN,J.] 433 Jaideep Gupta and Ms. Gauri for Khaitan and Co. for the Appellant. A M.S. Usgaokar, Additional Solicitor General, Dhruv Mehta and V.K. Verma for the Respondent. The Judgment of the Court was delivered by SEN, J. The dispute in this case is about the
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