Capital Goods - The Legal Chamber

This Supreme Court judgment clarifies that central excise duty is leviable only on movable “goods.” The final assembled boiler, being an immovable plant, is not excisable. Consequently, the value of bought-out items delivered directly to the site cannot be included in the assessable value for duty computation. The extended limitation period for the show-cause notice was also held inapplicable. Facts Of The Case: The appellant, Lipi Boilers Ltd., entered into a contract to design, procure, manufacture, and supply machinery for a steam generating plant, including a 50 TPH boiler. The boiler was manufactured and cleared from the factory in a Completely Knocked Down (CKD) condition upon payment of central excise duty. Certain essential items, such as feed pumps and fans, were purchased duty-...

The Supreme Court held that a press release announcing a policy change does not constitute a "Change in Law" under a Power Purchase Agreement, as only duly promulgated notifications have legal force. It further ruled that deemed export benefits under the Foreign Trade Policy are inapplicable to immovable, integrated power plants, as the policy is designed for movable "goods" and requires strict adherence to defined supply and procurement conditions. Facts Of The Case: The case involved appeals by Nabha Power Limited and Talwandi Sabo Power Limited against the Punjab State Power Corporation Limited (PSPCL). The dispute arose from a Power Purchase Agreement (PPA) executed following a tariff-based competitive bidding process. The appellants claimed that post-bid notifications from the...

Tag: Capital Goods

Supreme Court: Immovable Plant Not ‘Goods’, Excise Duty Not Levied on Bought-Out Parts

What Qualifies as ‘Goods’? Supreme Court Explains Why a Power Plant Isn’t Eligible for Export Benefits