LIPI BOILERS LTD. versus THE COMMISSIONER OF CENTRAL EXCISE, AURANGABAD

LIPI BOILERS LTD. versus THE COMMISSIONER OF CENTRAL EXCISE, AURANGABAD

The Court held that the product resulting from the contract (the steam generating plant assembled and commissioned at site) is an immovable property and therefore not 'goods' excisable under the Act; consequently the transaction value (contract price) could not be used to impose excise on the boiler by including the value of duty-paid bought out items delivered directly to site; further, the extended five-year limitation under the proviso to Section 11A(1) could not be invoked as revenue failed to prove wilful suppression with intent to evade duty, rendering the show cause notice invalid; accordingly the CESTAT order was set aside and the appeals allowed.

Parties
Appellant / Assessee: Lipi Boilers Ltd.; Respondent / Revenue: The Commissioner of Central Excise, Aurangabad
Jurisdiction
India
Judgment Date
10 November 2025
Procedural Posture
Civil Appeal (civil Appeal No(s). 856 857 of 2011) Under Section 35 L(1)(b) of the Central Excise Act, 1944 / Final Appellate Judgment of the Supreme Court (10 November 2025)
Outcome
Appeals allowed
Legal Topics
Valuation of Excisable Goods, Excisability / Movability, Immovability and Erection/installation, Extended Period of Limitation (section 11 A), Show Cause Notice, CENVAT / Recovery Under Section 11 D
Central Excise Taxation Administrative Law Contract Law Valuation of Excisable Goods Excisability / Movability Immovability and Erection/installation Extended Period of Limitation (section 11 A) +2 more

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Parties

Lipi Boilers Ltd.

Appellant / Assessee

The Commissioner of Central Excise, Aurangabad

Respondent / Revenue

Procedural Posture

Civil Appeal (civil Appeal No(s). 856 857 of 2011) Under Section 35 L(1)(b) of the Central Excise Act, 1944 / Final Appellate Judgment of the Supreme Court (10 November 2025)

Legal Issues

  1. 1 Whether the value of duty-paid bought out items delivered directly at the buyer’s site is liable to be included in the value of the boiler cleared in CKD condition for assessment of central excise duty
  2. 2 Whether the show cause notice invoking the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944, is legal and valid

Ratio Decidendi

The Court held that the product resulting from the contract (the steam generating plant assembled and commissioned at site) is an immovable property and therefore not 'goods' excisable under the Act; consequently the transaction value (contract price) could not be used to impose excise on the boiler by including the value of duty-paid bought out items delivered directly to site; further, the extended five-year limitation under the proviso to Section 11A(1) could not be invoked as revenue failed to prove wilful suppression with intent to evade duty, rendering the show cause notice invalid; accordingly the CESTAT order was set aside and the appeals allowed.

Court Disposition

Appeals allowed

Orders

  • Impugned order of the CESTAT dated 23.09.2010 set aside
  • Show cause notice issued under the proviso to Section 11A(1) held to be invalid