Triveni Engineering & Industries Ltd. v. Commissioner of Central Excise (2000)

Quick Summary

Triveni Engineering decided if a turbo alternator is “goods” for excise duty. The Court held: the finished turbo alternator comes into being only after the turbine and alternator are fixed together at the customer’s site. As a result, it is not separately marketable as such. Therefore, it is not excisable. Appeals allowed; tribunal order set aside.

Issues

• Can a turbo alternator be charged to excise duty under the Act?
• Do the tests of manufacture, marketability, and mobility stand satisfied?

Rules

• For excise duty (Section 3), an article must be: (i) excisable goods, and (ii) produced or manufactured in India.
• “Goods” must have marketability (can be taken to market and sold as such) and mobility.

Arguments

Judgment

The Supreme Court allowed the appeals with costs and set aside the tribunal’s order. The Court held that the finished turbo alternator is not excisable.

• It comes into existence as a distinct unit only after site assembly and fixing.
• To take it to market as “turbo alternator,” it would have to be separated back into turbine and alternator—then it is no longer the same goods.
• Removal needs only unbolting/uncoupling, but the real test here is marketability as such, which fails.

Ratio Decidendi

The twin conditions under Section 3—excisable goods and manufacture in India—must be met. “Goods” must be marketable as such and have mobility. A turbo alternator becomes a distinct product only after site fixing; it is not marketable as a separate movable article. Therefore, it is not excisable.

Why It Matters

• Clarifies marketability as a core test for excise duty.
• Helps industry on site-assembled machinery and large installations.
• Guides classification under the Central Excise Tariff Act, 1985.

Key Takeaways

• Marketability rules: The article must be saleable as such.
• Mobility matters: Being movable in commerce is key.
• Site assembly ≠ automatic manufacture: Look for a new, marketable product.
• Turbo alternator: Not excisable as a separate movable good.

Mnemonic + 3-Step Hook

Mnemonic: T-U-R-B-O — Two parts, Unite at site, Requires marketability, Bolts don’t decide, Out of excise.

1. Ask: Is there a new product known to the market?
2. Check: Can it be sold as such (not by breaking into parts)?
3. Conclude: If not saleable as such, not excisable.

IRAC Outline

Glossary

Marketability

Capability of being taken to market and sold as such.

Mobility

Being movable in commerce without losing identity as goods.

Manufacture

Bringing into existence a new, distinct product known to the market.

Heading 85.02

Tariff entry related to certain electric generators/alternators under CET Act, 1985.

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