COMMISSIONER OF CENTRAL EXCISE, AHMEDABADversusSOLID & CORRECT ENGINEERING WORKS & ORS.

                        [2010] 4 S.C.R. 476


A    COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD
                                 v.
       SOLID & CORRECT ENGINEERING WORKS & ORS.
            (Civil Appeal Nos. 960-966 of 2003 etc.)
                           APRIL 8, 2010
B
                 [D.K. JAIN AND T.S. THAKUR, JJ.]

       Central Excise Act, 1944- s. 2 (d)- Setting up of Asphalt
  Drum Mix Plant by using duty paid components - Whether
C amounts to manufacture of 'exigible goods' - Held: Setting
  of the plant does not amount to manufacture of 'exigib/e
  goods' as the same is not permanently fixed in earth.

        Notification - Notification No. 1193-CE, dated 28th
    February, 1993 - Issued u/s. 5A(1) of Central Excise Act -
0
    Benefit under - Entitlement of, to manufacturers of parts and
    components used for setting up Asphalt Drum/Hot Mix Plant.

         Maxim - 'quidcquid plantatur solo, solo-cedit' -
    Applicability of.
E
         Words and Phrases - ' Moveable property' - Meaning
    of - Transfer of Property Act, 1882 - s. 3 - General Clauses
    Act, 1897 - s. 3(26).

F      The questions for consideration before this Court
  were whether setting up of an Asphalt Drum Mix Plant by
  using duty paid components tantamounts to manufacture
  of excisable goods within the meaning of Section 2(d) of
  the Central Excise Act, 1944; and whether the
  respondents engaged in the manufacture of parts and
G components used for setting up of Asphalt Drum/Hot Mix
  Plant were entitled to the benefit of Notification No.1/93-
  CE, dated 28th February, 1993 issued under sub-section
  (1) of Section 5A of the Act, as amended from time to time.

H                               476
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 477
       SOLID & CORRECT ENGG. WORKS
    Allowing the appeals and remanding the matters               A
back to the Tribunal, the Court

     HELD: 1.1. Once a machine is fixed, embedded or
assimilated in a permanent structure, the movable
character of the machine becomes extinct. The same               8
cannot thereafter be treated as moveable so as to be
dutiable under the Excise Act. But cases in which there
is no assimilation of the machine with the structure
permanently, would stand on a different footing. In the
instant case all that has been said by the assessee is that      C
the machine is fixed by nuts and bolts to a foundation not
because the intention was to· permanently attach it to the
earth but because a foundation was necessary to
provide a wobble free operation to the machine. An
attachment of this kind without the necessary intent of
making the same permanent, cannot constitute                     D
permanent fixing, embedding or attachment in the sense
that would make the machine a part and parcel of the
earth permanently. In that view of the matter, it is held that
the plants in question were not immovable property so
as to be immune from the levy of excise duty. [Para 33]          E
[496-D-G]

      Triveni Engineering & Industries Ltd. and Anr. v.
 Commissioner of Central Excise 2000 (120) ELT 273 {SC);
 Quality Steel Tubes (P) Ltd. v. CCE, U.P. 1995 (75) ELT 17      F
·{SC); Mittal Engineering Works (P) Ltd. v. CCE, Meerut 1996
 (88) ELT 622 (SC); T. T.G. Industries Ltd. v. CCE, Raipur
 2004 (167) ELT 501 {SC) - distinguished.

     Sirpur Paper Mills Ltd. v. Collector of Central Excise,
Hyderabad 1998 (1) SCC 400; Mis Name Tulaman                     G
Manufacturers Pvt. Ltd. Hyderabad v. Collector of Central
Excise, Hyderabad 1989 (1) SCC 172, relied on.
   1.2. The manufacture of the plants in question do not
constitute annexation hence cannot be termed as                  H
    478    SUPREME COURT REPORTS               [2010] 4 S.C.R.

A immovable property for the following reasons: (i) The
  plants in question are not per se immovable property. (ii)
  Such plants cannot be said to be "attached to the earth"
  within the meaning of that expression as defined in
  Section 3 of the Transfer of Property Act. (iii) The fixing
B of the plants to a foundation is meant only to give stability
  to the plant and keep its operation vibration free. (iv) The
  setting up of the plant itself is not intended to be
  permanent at a given place. The plant can be moved and
  is indeed moved after the road construction or repair
c project for which it is set up is completed. [Para 24] [491-
    D-G]                                             '

       1.3. The expression "attached to the earth" has three
  distinct dimensions, viz. (a) rooted in the earth as in the
  case of trees and shrubs (b) imbedded in the earth as in
D the case of walls or buildings or (c) attached to what is
  imbedded for the permanent beneficial enjoyment of that
  to which it is attached. Attachment of the plant in question
  with the help of nuts and bolts to a foundation not more
  than 1% feet deep intended to provide stability to the
E working of the plant and prevent vibration/wobble free
  operation does not qualify for being described as
  attached to the earth under any one of the three clauses
  extracted above. [Para 19] [489-A-C]
F     1.4. In English law the general rule is that what is
  annexed to the freehold becomes part of the realty under
  the maxim quidcquid plantatur solo, solo cedit. This maxim,
  however, has no application in India. Even so, the
  question whether a chattel is imbedded in the earth so
  as to become immovable property is decided on the
G same principles as those which determine what
  constitutes an annexation to the land in English law. The
  English law has evolved the twin tests of degree or mode
  of annexation and the object of annexation. The English
  law attaches greater importance to the object of
H annexation which is determined by the circumstances of
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 479
       SOLID & CORRECT ENGG. WORKS

each case. One of the important consideraUons is             A
founded on the interest in the land wherein the person
who causes the annexation possesses articles that may
be removed without structural damage and even articles
merely resting on their own weight are fixtures only if
they are attached with the intention of permanently          B
improving the premises. The Indian law has developed
on similar lines and the mode of annexation and object
of annexation have been applied as relevant test in this
country also. There are cases where machinery installed
by monthly tenant was held to be moveable property as        c
in cases where the lease itself contemplated the removal
of the machinery by the tenant at the end of the tenancy.
The mode of annexation has been similarly given
considerable significance by the courts in this country in
order to. be treated as fixture. Attachment to the eartt:i   0
must be as defined in Section 3 of the Transfer of
Property Act. [Paras 21 and 22] [489-G-H; 490-A, C-F]

    Wake v. Halt (1883) 8 App Cas 195 - referred to.

     2. The respondents engaged in the manufacture of E
parts and components used for setting up of Asphalt
Drum/Hot Mix Plant were not entitled to the benefit of
Notification No.1/93-CE, dated 28th February, 1993 issued
under sub~section (1) of Section 5A of the Central-Excise
Act, 1944 as amended from time to time. The view taken F
by the Tribunal that the respondents-manufacturing units
were entitled to the benefit of exemption under
Notification No.1/93 as the use of brand name Solidmec
for the plants or the components manufactured by such
units did not disentitle the said units from claiming the G
benefit of the exemption having regard to the fact that the
size of the sticker giving the brand name of the
manufacturing units was bigger than that of Solidmec, the
marketing company, is not correct. [Paras 8 and 35) [485-
C-D; 497-A-C]                               •
                                                            H
    480      SUPREME COURT REPORTS              [2010] 4 S.C.R.


A                        Case Law Reference:

          1883 (8) App Cas 195 Referred to.            Para 21

          1998 (1) sec 400        Relied on.           Para 26

          1989 (1) sec 112        Relied on.           Para 27
B
          2000 (120) ELT 273(SC) Distinguished.        Para 28

          1995 (75) ELT 17(SC)    Distinguished.       Para 30

          1996 (88) ELT 622(SC) Distinguished.         Para 30
c
          2004 (167) ELT 501(SC) Distinguished.        Para 32

        CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
    960-966 of 2003.

D       From the Judgment & Order dated 19.8.2002 of the
    Customs, Excise and Gold (Control) Appellate Tribunal, West
    Regional Bench at Mumbai in Final Order Nos. Cl/2403-09/
    WZB/2002 in Appeal Nos. E/1203-1209/2001-Mumbai.

                                 WITH
E
    C.A. Nos. 5416-5462 of 2003.

         P.P. Malhotra, ASG, Rupesh Kumar, Rashmi Malhotra,
    B.K. Prasad, Anil Katiyar for the Appellant.
F
        S.K. Bagaria, Tarun Gulati, Rony John, Kishore Kuna!,
    Pavan Kumar for the Respondents.

          The Judgment of the Court was delivered by

G      T.S. THAKUR, J. 1. These appeals under Section 35L(b)
  of the Central Excise Act, 1944 arise out of orders dated 19th
  August, 2002 and 8th April, 2003 passed by the Customs
  Excise and Gold (Control) Appellate Tribunal, West Regional
  Bench, Mumbai, whereby the Tribunal has set aside the order
H passed by the Commissioner of Customs & Central Excise,
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 481
 SOLID & CORRECT ENGG WORKS [T.S. THAKUR, J.]

Ahmedabad, confirming the duty demanded from the                     A
respondents as also levying penalties upon them under
different provisions of the Central Excise Act, 1944. The
controversy in the appeals lies in narrow compass, but before
we formulate the precise questions that fall for our
determination, it is necessary to briefly set out the factual        B
backdrop in which the same arises.

      2. M/s Solid and Correct Engineering Works, Mis Solid
 Steel Plant Manufacturers and M/s Solmec Earthmovers
 Equipment are partnership concerns engaged in the                   C
 manufacture of parts and components for road and civil
construction machinery and equipments lil~e Asphalt Drum/Hot
 Mix Plants and Asphalt Paver Machine etc. Mis Solex
 Electronics Equipments is, however, a proprietary concern
engaged in the manufacture of Electronic Control Panels
 Boards. It is riot in dispute that the three partnership concerns   D
mentioned above are registered with Central Excise
Department nor is it disputed that the proprietary concern is a
small scale industrial unit that is availing exemption from
payment of duty in terms of the relevant exemption notification.
M/s Solidmec Equipments Ltd. (hereinafter referred to as             E
'Solidmec' for short) the fifth unit with which we are concerned
in the present appeals is a marketing company engaged in the
manufacture of Asphalt Drum/Hot Mix Plants at the sites
provided by the purchasers of such plants. It is common ground
that Solidmec advertises its product and undertakes contracts        F
for supplying, erection, commissioning and after sale services
relating thereto. It is also admitted that all the five concerns
referred to above are closely held by Shri Hasmukhbhai his
brothers and the members of their families.
                                                                     G
     3. An inspection of the factories of the respondents by a
team of officers from Central Excise, Preventing Wing,
Headquarters, Ahmedabad, led to the issue of a notice dated
30th November 1999 to the four manufacturing units as well as
to Solidmec calling upon them to show cause why the amounts          H
    482     SUPREME COURT REPORTS                [2010] 4 S.C.R.


A mentioned in the said notice be not recovered from them
  towards central excise duty. The notice accused the four
  manufacturing units of having wrongly declared and classified
  parts and components being manufactured by them as
  complete plants/systems, even when they were merely parts
B and components and not machines or plants functional by
  themselves. The erroneous classification and declaration was,
  according to the notice, intended to avoid payment of higher
  rate of duty applicable to parts of such plants and machinery
  at the material point of time. The notice also pointed out that
c the units manufacturing parts and components of the plants had
  availed benefi~ of exemption wrongly and in breach of the
  provisions of Rules 9(1) and 173F and other rules regulating
  the grant of such benefit.

        4. In so far as Solidmec marketing company was
D concerned, the show cause notice alleged that Solidmec was
  engaged in the manufacturing of Asphalt Batch Mix, Drum Mix/
  Hot Mix Plant by assembling and installing the parts and
  com~onents manufactured by the manufacturing units of the
  group. According to the notice the process of assembly of the
E parts and components at the site provided by the purchasers
  of such plants was tantamount to manufacture of such plants
  as a distinct product with a new name, quality, usage and
  character emerged out of the said process. Resultantly the end-
  product; namely, Asphalt Drum/Hot Mix Plants became exigible
F to Central Excise duty, which duty Solidmec had successfully
  avoided. The notice also proposed to levy penalties upon all
  the five concerns under appropriate provisions of the Central
  Excise Act.

G      5. The respondents filed their responses to the show cause
  notice, which were duly considered by the Commissioner who
  confirmed the duty demanded in the show cause notice and
  levied suitable penalties upon each one of the units. Aggrieved
  by the order passed by the Commissioner the respondents
H preferred appeals before the Customs, Excise and Gold
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 483
 SOLID & CORRECT ENGG. WORKS [T.S. THAKUR, J.]

(Control) Appellate Tribunal (for short 'CEGAT') which were       A
partly allowed by the Tribunal by its order dated 19th August,
2002. Relying upon the material on record and the depositions
of the partners comprising the concerns, the Tribunal held that
Solidmec had supplied all the components at the buyer's site
some of which had been manufactured by the manufacturing          B
units of the group while others were purchased from the market.
The cost of erection, commissioning etc. was also charged by
Solidmec from the buyers. Solidmec was, therefore, engaged
in the manufacture of the plants in question declared the
Tribunal in the following words:                                  c
    "The sum total of the aforesaid evidence is that M/s
    Solidmec supplied all the essential components to make
    a hot mix plant at the buyer's site. Some of the components
    were manufactured by the manufacturing units and the
    other components were purchased from the market. These        D
    were erected and commissioned by Solidmec and the
    cost of erection, commissioning, etc:, were charged from
    the buyers. In these circumstances they deserve to be
    termed as manufacturers."
                                                                   E
     6. The Tribunal next examined the question whether the
plants so manufactured could be termed as "goods". Relying
upon the decision of this Court in Triveni Engineering &
Industries Ltd. & Anr. V. Commissioner of Central Excise
2000 (120) ELT 273 (SC) the Tribunal held that since the F
dimensions of the plant were substantial comprising three main
components namely, 4 bin feeder, the conveyor and dryer unit
and since the said components had to be separately embedded
in earth on a foundation 1.5 feet deep what was manufactured
could not be said to be "goods" especially when the same G
could not be dismantled and re-assembled without undertaking
the necessary civil works. The duty demand raised against
Solidmec was on that basis set aside leaving open certain
other related issues including the question of jurisdiction of the
Commissioner. The Tribunal further held that the manufacturing
                                                                  H
    484      SUPREME COURT REPORTS                  [2010] 4 S.C.R.


A units were entitled to the benefit of exemption under Notification
  1/93. The use of brand name "Solidmec" for the plants or their
  components manufactured by the sister concerns did not,
  according to the Tribunal, disentitle the said units to the benefit
  of exemption having regard to the fact that the size of the
B stickers giving the brand name of the manufacturing units was
  bigger than that of Soiidmec the marketing company. The plea
  of limitation raised by the respondents was, however, left
  undecided by the Tribunal keeping in view the fact that the
  erection of plants by Solidmec did not in the opinion of the
C Tribunal amount to manufacture of exigible goods. In the ultimate
  analysis the Tribunal upheld the demand of Rs.1,97,875/-
  against M/s Solmec Earthmovers Equipments and
  Rs.2, 16,347/- against M/s Solid and Correct Engineering
  Works but reduced the penalty levied upon them to Rs.2 lakhs
  each. The penalty levied upon the partners was, however,
0
  remitted. The order of confiscation of the plant, land and
  building was .in consequence of the findings recorded by the
  Tribunal set aside.

       7. An application seeking rectification of the above order
E was then filed before the Tribunal by the respondents. It was
  argued that the Tribunal had upheld the duty and penalties levied
  upon the respondents-applicants on the premise that the
  respondents had not contested the classification of the products
  under Sub-heading 8474.90 as parts and components in place
F of Sub-heading 8474.10 applicable to complete machines. It
  was urged that although the applicants had not questioned the
  classification determined by the Department in the order
  passed by the Commissioner it had specifically pleaded that
  the entire demand for duty was barred by limitation. The
G Tribunal accepted that argument and accordingly by its order
  dated 8th April, 2003 modified its earlier order and deleted the
  demand of duty as also the penalty in toto. The subsequent
  order deleting the duty and penalty in toto has been questioned
  in CA Nos.5461-5462/2003.
H
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 485
 SOLID & CORRECT ENGG. WORKS [T.S. THAKUR, J.]

     8. We have heard Mr. P.P. Malhotra, learned Additional                                A
Solicitor General for the appellants and Mr. S.K. Bagaria,
learned senior counsel for the respondents at length. Two
questions in our opinion arise for our determination:

        (1)     Whether setting up of an Asphalt Drum Mix Plant                             8
                by using duty paid components tantamounts to
                manufacture of excisable goods within the meaning
                of Section 2(d) of the Central Excise Act, 1944?
                and

        (2)     Whether· the respondents engaged in the                                     C
                manufacture of parts and components used for
                setting up of Asphalt Drum/Hot Mix Plant were
                entitled to the benefit of Notification No .1 /93-CE,
                dated 28th February, 1993 issued under sub-
                section (1) of Section 5A of the Central Excise Act,                        D ·
                1944 as amended from time to time?

      9. We shall take up the questions ad seriatim.

Re: Question No.1
                                                                                            E
    · 10. Section 3 of the Central Excise Act, 1944, inter alia,
sanctions what was during the relevant period called 'central
excise duty' on all "excisable goods" produced or manufactured
in India at the rates set forth in First Schedule to the Central
Excise Tariff Act, 1985. The term "excisable goods" appearing                                F
in Section 3 has been defined under Section 2(d) of the said
Central Excise Act which reads as under:

       "2(d): "excisable goods" means goods specified in the
        First Schedule and the Second Schedule to the_ Centr~I                              G
        Excise Tariff Act, 1985 as being subject to a duty;ofexcise
       and includes salt.                                  ·                    ·
 .;\i :·.3rl'lJ ~ ...-., f[srO t;t }ll~~, lf.; /i: •OL-'1tr1;z "'.. i~j:·~r::8 L\~ L !'-
( 1 ;, E~plan(ition:1 For.Jhe purposes ofrth,is clause; •"gooµs:·
r, j ,:includes any article;·material:or<subs~re.ewhic.h is yapable                        l-,

                                                                                            H
    486      SUPREME COURT REPORTS                 [2010] 4 S.C.R.


A         of being bought and sold for a consideration and such
          goods shall be deemed to be marketable."

        11. Entry 8474 in the First Schedule to the Central Excise
    and Tariff Act, 1985 stipulates the rate at which excise was
    payable on machinery of the kind enumerated in that Entry
8
    which reads:

          "Machinery for sorting, screening, separating, washing,
          crushing, grinding, mixing or kneading earth, stone, ores
          or other mineral substances, in solid (including powder or
C         paste) form; machinery for agglomerating, shaping or
          moulding solid mineral fuels, ceramic paste, unhardened
          cements, plastering materials or other mineral products in
          powder or paste form; machines for forming foundry
          moulds of sand."
D
        12. It is evident from the above that any machinery which
  is used for mixing is dutiable. That Asphalt Drum/Hot Mix Plant
  is a machinery meant for mixing etc. was not disputed before
  us. It was fairly conceded by Mr. Bagaria that assembling,
E installation and commissioning of Asphalt Drum/Hot Mix Plants
  amounted to manufacture inasmuch as the plant that eventually
  came into existence was a new product with a distinct name,
  character and use different from what went into its manufacture.
  Super added to the above is the fact that Section 2(f) of the
  Central Excise Act does not define the term "manufacture"
F exhaustively. The definition is inclusive in nature and has been
  understood to mean bringing into existence a new product with
  a distinct name, character and use. (See (i) Union of India V.
  Delhi Cloth and General Mills Co. Ltd. (1977) 1 ELT 199, (ii)
  BPL India Ltd. V. CCE (2002) 5 SCC 167, (iii) Sirpur Paper
G Mills Ltd. V. Collector of Central Excise, Hyderabad ( 1998 ( 1)
  sec 400).
       13. Mr. Bagaria strenuously argued that even when the
  setting up of the plant has been held to be tantamount to
H manufacture of a plant and even when the plant may be
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 487
 SOLID & CORRECT ENGG. WORKS [T.S. THAKUR, J.]

machinery covered by Entry 8474 of the First Schedule to the          A
Central Excise Act, the same would not necessarily amount to
manufacture of 'exigible goods' keeping in view the fact that
such plants have to be permanently embedded in earth.
Reliance in support was placed by Mr. Bagaria upon the finding
recorded by the Tribunal that the plant is required to be fixed
                                     \
                                                                      B
to a foundation that is 1 and Yi ft. deep for the sake of stability
of the plant which causes heavy vibration.s while in operation.
The following passage from the Tribunal's order was in
particular relied upon by Mr. Bagaria in support of his
submission that the size and nature of the plant was such as          c
made its fixing to the ground essential:
     "The individual element such as feeder bins, conveyor,
     rotary mixing drum, asphalt tank, fuel tanks, etc. have to
     be separately embedded into the earth. This is done on
     a civil foundation of 1.5 deep. This is because the weight       D
     of the material as well as the vibrations caused by the
     movement thereof is very substantial. The drier at one time
     holds 40MT of raw material."
     14. Relying upon certain decisions of this Court, Mr.            E
Bagaria argued that the plants in question did not satisfy the
test of marketability and moveability. According to Mr. Bagaria,
the setting up of the plant was no more than an accretion/
annexation to immovable property which was far from
manufacture of goods exigil::lle to excise duty. We shall
presently refer to the decisions relied upon by Mr. Bagaria, but
                                                                      F
before we do so we may briefly refer to the relevant statutory
provisions to examine, what would constitute moveable or
immoveable property.
     15. The expression "moveable property" has been defined          G
in Section 3(36) of the General Clauses Act, 1897 as under:
    "Section 3(36) : "movable property" shall mean property of
    every description, except immovable property."
    16. From the above it is manifest that the answer to the          H
    488       SUPREME COURT REPORTS                   [2010] 4 S.C.R.


A   question whether the plants in question are movable property,
    would depend upon whether the same are immovable property.
    That is because anything that is not immovable property is by
    this very definition extracted above "moveable" in nature.

       17. Section 3 of the Transfer of Property Act, 1882 does
8 not spell out an exhaustive definition of the expression
  "immovable property". It simply provides that unless there is
  something repugnant in the subject or context 'immovable
  property' under the Transfer of Property Act, 1882 does not
  include standing timber, growing crops or grass. Section 3(26)
C of the General Clauses Act, 1897, similarly does not provide
  an exhaustive definition of the said expression. It reads:

          "Section 3(26) : "immovable property" shall include land,
          benefits to arise out of land, and things attached to the
D         earth, or permanently fastened to anything attached to the
          earth."

       18. It is not the case of the respondents that plants in
  question are per se immoveable property. What is argued is
  that they become immovable as they are permanently
E imbedded in earth in as much as they are fixed to a foundation
  imbedded in earth no matter only 1Yi feet deep. That argument
  needs to be tested on the touch stone of the provisions referred
  to above. Section 3(26) of the General Clauses Act includes
  within the definition of the term "immovable property" things
F attached to the earth or permanently fastened to anything
  attached to the earth. The term "attached to the earth" has not
  been defined in the General Clauses Act, 1897. Section 3 of
  the Transfer of Property Act, however, gives the following
  meaning to the expression "attached to the earth":
G         "(a) rooted in the earth, as in the case of trees and shrubs;

          (b) imbedded in the earth, as in the case of walls and
          buildings;

          (c) attached to what is so imbedded for the permanent
H
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 489
 SOLID & CORRECT ENGG. WORKS [T.S. THAKUR, J.]

    beneficial enjoyment of that to which it is attached."         A

      19. It is evident from the above that the expression
"attached to the earth" has three distinct dimensions, viz. (a)
rooted in the earth as in the case of trees and shrubs (b)
imbedded in the earth as in the case of walls or buildings or
                                                                   8
(c) attached to what is imbedded for the permanent beneficial
enjoyment of that to which it is attached. Attachment of the plant
in question with the help of nuts and bolts to a foundation not
more than 1Yi feet deep intended to provide stability to the
working of the plant and prevent vibration/wobble free operation
does not qualify for being described as attached to the earth C
under any one of the three clauses extracted above. That is
because attachment of the plant to the foundation is not
comparable or synonymous to trees and shrubs rooted in earth.
It is also not synonymous to imbedding in earth of the plant as
in the case of walls and buildings, for the obvious reason that D
a building imbedded in the earth is permanent and cannot be
detached without demolition. lmbedding of a wall in the earth
is also in no way comparable to attachment of a plant to a .
foundation meant only to provide stability to the plant especially
because the attachment is not permanent and what is attached E
can be easily detached from the four.dation. So also the
attachment of the plant to the foundation at which it rests does
not fall in the third category, for an attachment to fall in that
category it must be for permanent beneficial enjoyment of that ·
to which the plant is attached.                                    F
     20. It is nobody's case that the attachment of the plant to
the foundation is meant for permanent beneficial enjoyment of
either the foundation or the land in which the same is imbedded.

     21. In English law the general rule is that what is annexed   G
to the freehold becomes part of the realty under the maxim
quidcquid plantatur solo, solo cedit. This maxim, however, has
no application in India. Even so, the question whether a chattel
is imbedded in the earth so as to become immovable property
is deci_ded on the same principles as those which determine        H
    490       SUPREME COURT REPORTS                     [2010] 4 S.C.R.


A what constitutes an annexation to the land in English law. The
  English law has evolved the twin tests of degree or mode of
  annexation and the object of annexation. In Wake V. Halt
  (1883) 8 App Cas 195 Lord Blackburn speaking for the Court
  of Appeal observed:
B
          "The degree and nature of annexation is an important
          element for consideration; for where a chattel is so
          annexed that it cannot be removed without great damage
          to the land, it affords a strong ground for 1thinking that it was
          intended to be annexed in perpetuity to the land."
c
          22. The English law attaches greater importance to the
     object of annexation which is determined by the circumstances
     of each case. One of the important considerations is founded
     on the interest in the land wherein the person who causes the
0    annexation possesses articles that may bei removed without
     structural damage and even articles merely resting on their own
     weight are fixtures only if they are attached with the intention of
     permanently impr0ving the premises. The Indian law has
     developed on similar lines and the mode of annexation and
E    object of annexation have been applied as relevant test in this
     country also. There are cases where machinery installed by
    monthly tenant was held to be moveable property as in cases
    where the lease itself contemplated the removal of the
    machinery by the tenant at the end of the tenancy. The mode
    of annexation has been similarly given considerable
F   significance by the courts in this country in order to be treated
    as fixture. Attachment to the earth must be as defined in
    Section 3 of the Transfer of Property Act. For instance a hut is
    an immovable property, even if it is sold with the option to pull
    it down. A mortgage of the super structum of a house though
G   expressed to be exclusive of the land beneath, creates an
    interest in immovable property, for it is permanently attached
    to the ground on which it is built.

      23. The courts in this country have applied the test whether
H the annexation is with the object of permanent beneficial
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 491
 SOLID & CORRECT ENGG. WORKS [TS. THAKUR, J.]

enjoyment of the land or building. Machinery for metal-shaping        A
and electro-plating which was attached by bolts to special
concrete bases and could not be easily removed, was not
treated to be a part of structure or the soil beneath it, as the
attachment was not for more beneficial enjoyment of either the
soil or concrete. Attachment in order to qualify the expression       B
attached to the earth, must be for the beneficial attachment of
that to which it is attached. Doors, windows and shutters of a
house are attached to the house, which is imbedded in the
earth. They are attached to the house which is imbedded in
the earth for the beneficial enjoyment of the house. They have        c
no separate existence from the house. Articles attached that
do not form part of the house such as window blinds, and
sashes, and ornamental articles such as glasses and tapestry
fixed by tenant, are not affixtures.

     24. Applying the above tests to the case at hand, we have        D
no difficulty in holding that the manufacture of the plants in
question do not constitute annexation hence cannot be termed
as immovable property for the following reasons:
    (i) The plants in question c.tre not per se immovable             E
    property.
    (ii) Such plants cannot be said to be "attached to the earth"
    within the meaning of that expression as defined in Section
    3 of the Transfer of Property Act.
                                                                      F
    (iii) The fixing of the plants to a foundation is meant only
    to give stability to the plant and keep its operation vibration
    free.

    (iv) The setting up of the plant itself is not intended to be
    permanent at a given place. The plant can be moved and            G
    is indeed moved after the road construction or repair
    project for which it is set up is completed.
    25. We may, at this stage, refer to the decisions of this
Court which were relied upon by learned counsel for the parties
                                                                      H
    492     SUPREME COURT REPORTS                 [2010] 4 S.C.R.


A in support of their respective cases.
       26. In Sirpur Paper Mills Ltd. (supra) this Court was
  dealing with a near similar situation as in the present case.
  The question there was whether the paper machine assembled
  at site mainly with the help of components bought from the
8 market was dutiable under the Central Excis1e Act, 1944. The
  argument advanced on behalf of the assess1~e was that since
  the machine was embedded in a concrete base the same was
  immovable property even when the embedding was meant only
  to provide a wobble free operation of the machine. Repelling
C that contention this Court held that just because the machine
  was attached to earth for a more efficient working and
  operation the same did not per se become immovable property.
  The Court observed:

D      "5. Apart from this finding of fact made by the Tribunal, the
       point advanced on behalf of the appellant, that whatever '
       is embedded in earth must be treated as immovable.
       property is basically not sound. For example, a factory
       owner or a householder may purchase a water pump and
       fix it on a cement ba:se for operational efficiency and also
E
       for security. That will not make the water pump an item of
       immovable property. Some of the components of the water
       pump may even be assembled on site. That too will not
       make any difference to the principle. The test is whether
       the paper-making machine can be sold in the market. The
F      Tribunal has found as a fact that it can be sold. In view of
       that finding, we are unable to uphold the contention of the
       appellant that the machine must be treated as a part of the .
       immovable property of the Company .•Just because a plant
       and machinery are fixed in the earth for better functioning,
G      it does not automatically become an immovable property."
       27. In Mis Name Tulaman Manufacturers Pvt. Ltd.
  Hyderabad V. Collector of Central Excise, Hyderabad (1989
  (1) sec 172), this Court was examining whether the assembly
H of parts of machine by an assessee to bring into existence a
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 493
 SOLID & CORRECT ENGG. WORKS [TS. THAKUR, J.].

weighbridge as a complete machine amounted to manufacture            A
hence liable to duty even when its parts are separately taxable.
Answering the question in the affirmative this Court helc;I that
the assembling of the components of the weighbridge brought
into existence a complete weighbridge which had a distinctive
name, character and use hence exigible to duty. The fact that        B
the assessee was himself manufacturing only one part of the
component used in the erection of a weighbridge did not mean
that the complete machine once the same was assembled by
using duty paid parts was not exigible to excise duty.

      28. In Triveni Engineering's case (supra), the question that   C
fell for consideration was whether a turbo alternator comprising
two components (i) steam turbine and (ii) complete alternator
and fixing the same on a platform brought about a new dutiable
product. The Court held that the process of fixing the same on
a platform and aligning them in a specified manner that turbine      D
was nothing but a manufacturing process and a new commodity
come into existence in the said process. The machine so
manufactured was, however, erected on a platform specially
constructed for that purpose which made the machine
immovable in character. The Court declared that while                E
determining whether an article is permanently fastened to
anything attached to the earth both the intention as well as the
factum of fastening has to be ascertained from the facts and
circumstances of each case. The following passage is apposite
in this regard:                                                      F
      "There can be no doubt that if an article is an immovable
      property, it cannot be ter.med as "excisable goods" for
      purposes of the Act. From a combined reading of the
      definition of "immovable property" in Section 3 of the
      Transfer of Property Act, Section 3(25) of the General         G
      Clauses Act, it is evident that in an immovable property
    . there is neither mobility nor marketability as understood in
      the excise law. Whether an arlicle is permanently fastened
      to anything attached to the earlh requires determinati.on
      of both the intention as well as the factum of fastening to    H
    494      SUPREME COURT REPORTS                  [2010] 4 S.C.R.

A         anything attached to the earth. Ancl this has to be
          ascertained from the facts and circumstances of each
          case."

                                                (emphasis supplied)
8        29. Applying the above test to the case at hand, the plants
    in question were neither attached to earth within the meaning
    of Section 3(26) of the General Clauses Act nor was there any
    intention of permanently fastening the same to anything attached
    to the earth.
c          30. Reliance was placed by Mr. Bagaria upon the decision
     of this Court in Quality Steel Tubes (P) Ltd. V. CCE, U.P. 1995
     (75) ELT 17 (SC) and Mittal Engineering Works (P) Ltd. V.
     CCE, Meerut 1996 (88) ELT 622 (SC). In Quality Steel Tubes
    case (supra) this Court was examining whether 'the tube mill
D   and welding head' erected and installed by the assessee for
    manufacture of tubes and pipes out of duty paid raw material
    was assessable to duty under residuary Tariff Item No.68 of the
    Schedule being excisable goods. Answering the question in
    negative this Court held that tube mill and welding head erected
E   and installed in the premises and embedded to earth ceased
    to be goods within the meaning of Section 3 of the Act as the
    same no longer remained moveable goods that could be
    brought to market for being bought and sold. We do not see
    any comparison between the erection and installation of a tube
F   mill which involved a comprehensive process of installing slitting
    line, tube rolling plant, welding plant, testing equipment and
    galvanizing etc., referred to in the decision of this Court with
    the setting up of a hot mix plant as in this case. As observed
    by this Court in Triveni Engineering & lnclustries case (supra),
G   the facts and circumstances of each case shall have to be
    examined for determining not only the factum of fastening/
    attachment to the earth but also the intention behind the same.
      31. In Mittal Engineering Works case (supra), this Court
  was examining whether the mono vertical crystallisers erected
H and attached by a foundation to the earth on the site of the sugar
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 495
 SOLID & CORRECT ENGG. WORKS [T.S. THAKUR, J.]

factory could be treated as goods within the meaning of Central     A
 Excise Act, 19~. This Court on facts noted that mono vertical
crystallisers are fixed on a solid RCC slab having a load bearing
capacity of about 30 tonnes per sq. mt. and are assembled at
site with bottom plates, tank coils, drive frames, supports,
plates, distance places, cutters, cutter supports, tank ribs,       B
distance plate angles, water tanks, coil extension pipes, loose
 bend angles, coil supports, railing stands, intermediate
platforms, drive frame railings and flats, oil trough, worm
wheels, shafts, housing, stirrer arms and support channels,
pipes, floats, heaters, ladders, platforms, etc. The Court noted    c
that the mono vertical crystallisers have to be assembled,
erected and attached to the earth on a foundation at the site of
the sugar factory and are incapable of being sold to consumers
 in the market as it is without anything more. Relying upon the
decision of this Court in Quality Steel Tubes case (supra), the
                                                                    0
erection and installation of mono vertical crystallisers was held
not dutiable under the Excise Act. This Court observed that the
Tribunal ought to have remembered that mono vertical
crystallisers had, apart from assembly, to be erected and
attached by foundation to the earth and, therefore, were not, in    E
any event marketable as they were. This decision also, in our
opinion, does not lend any support to the case of the assessee
in these appeals as we are not dealing with the case of a
machine like mono vertical crystallisers which is permanently
embedded in the structure of a sugar factory as was the position
in the Mittal Engineering Works case (supra). The plants with       F
which we are dealing are entirely over ground and are not
assimilated in any structure. They are simply fixed to the
foundation with the help of nuts and bolts in order to provide
stability from vibrations during the operation.
                                                                    G
     32. So also in T. T. G. Industries Ltd. V. CCE, Raipur 2004
(167) ELT 501 (SC), the machinery was erected at the site by
the assessee on a specially made concrete platform at a level
of 25 ft. height. Considering the weight and volume of the
machine and the processes involved in its erection and
                                                                    H
    496      SUPREME COURT REPORTS                 [2010] 4 S.C.R.


A   installation, this Court held that the same was immovable
    property which could not be shifted without dismantling the
    same.

          33. It is noteworthy that in none of the cases relied upon
    by the assessee referred to above was them any element of
8
    installation of the machine for a given period of time as is the
    position in the instant case. The machines in question were by
    their very nature intended to be fixed permanently to the
    structures which were embedded in the earth. The structures
    were also custom made for the fixing of such machines without
C which the same could not become functional. The machines
    thus becoming a part and parcel of the structures in which they
    were fitted were no longer moveable goods. It was in those
    peculiar circumstances that the installation and erection of
    machines at site were held to be by this Court, to be immovable
D property that ceased to remain moveable or marketable as they
  . were at the time of their purchase. Once such a machine is
    fixed, embedded or assimilated in a permanent structure, the
    movable character of the machine becomes extinct. The same
    cannot thereafter be treated as moveable so as to be dutiable
E under the Excise Act. But cases in which there is no
    assimilation of the machine with the struc1ture permanently,
    would stand on a different footing. In the instant case all that
    has been said by the assessee is that the machine is fixed by
    nuts and bolts to a foundation not because the intention was to
F permanently attach it to the earth but because a foundation was
    necessary to provide a wobble free operation to the machine.
   An attachment of this kind without the necessary intent of making
   the same permanent cannot, in our opinion, constitute
   permanent fixing, embedding or attachment in the sense that
G would make the machine a part and pc:1rcel of the earth
    permanently. In that view of the matter we see no difficulty in
    holding that the plants in question were not immovable property
   so as to be immune from the levy of excise duty.

        34. Our answer to question no.1 is accordingly in the
H affirmative.
 COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD v. 497
. SOLID & CORRECT ENGG. WORKS [TS. THAKUR, J.]

Re: Question No.2                                                       A
      35. The Tribunal, as noticed in the earlier part of this order,
has taken the view that the respondents-manufacturing units
were entitled to the benefit of exemption under Notification No.1/
93 as amended from time to time as the use of brand name
                                                                        8
Solidmec for the plants or the components manufactured by
such units did not disentitle the said units from claiming the
benefit of the exemption having regard to the fact that the size
of the sticker giving the brand name of the manufacturing units
was bigger than that of Solidmec, the marketing company. Mr.            C
Bagaria learned senior counsel for the respondent fairly
conceded that the reasoning given by the Tribunal based on the
size of the sticker was not legally sustainable. He, however,
urged that since the manufacturing units had also raised some
other defences including one on the ground of limitation, even
if the order passed by the Tribunal was setaside, the matter            D
may have to go back to the Tribunal to enable it to examine the
said alternative contentions. Mr. Malhotra did not have any
serious objection to this course being followed. He urged and,
in our opinion rightly so, that since the Tribunal's view on the
question of exemption was unsustainable the order passed by             E
the Tribunal has to be set aside and the matter remitted back
for a fresh disposal qua the said units by reference to the other
contentions urged on behalf of the units which the Tribunal has
not examined. In that view of the matter our answer to question
No.2 is in the negative.                                                F

     36. In the result we allow these appeals, set aside orders
dated 19th August 2002 and 8th April 2003 passed by the
Tribunal and remand the matter back to the Tribunal for passing
fresh orders on the subject appropriately dealing with the
alternative contentions which the respondents may urge keeping          G
in view the observations made hereinabove. The appellants
shall also be entitled to one set of costs assessed at Rs.25,000/
- only.

K.K.T.                                          Appeals allowed.        H