Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 49 and 173(1) 1944-Section 35-Central Excise Salt Rules 1944-Rules 9 Central Excise & Salt Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Central Excise & Salt Act, 1944-Section 35-L- Central Excise Salt Rules 1944-Rules 9,49 and 173(1) as amended in 1979- Exigibility of duty-Goods mentioned in Schedule of Excise Tariff-whether dutiable as such-Held, No-Test of marketability-Goods produced or manufactured ipso facto do not attract duty-They must be marketable or capable or being marketed-Dutiability of goods captively consumed.The appellants were manufacturers and sellers of laminated sheets. In the process of manufacturing the sheets the appellants used the raw material by processing them with each other and with other material. In the process Phenol Formaldehyde was produced. The solution was taken out from the vessel in its semi-processed condition and was used without further processing in manufacture of laminated sheets. Since it was not marketed or sold by the appellants and the solution was captively consumed only, the Department did not levy any duty on it. In 1979, Rules 9,49 and 173(1) of the Central Excise Rules, 1994 were amended whereby even captively consumed goods produced or manufactured became dutiable. Consequently the Superintendent of Central Excise issued Notice that in view of the amendments in Rules phenol formaldehyde and melamine formaldehyde were liable to duty. The appellants claimed that the reacting mixtures were not only unstable having short life but they were not marketable in the form they were obtained in intermediate stage in a continuous process, that the reacting mixture in manufacture want on and it was complete on formations of laminated sheets by application of heat and pressure to these goods. The Assistant Collector found that the mixture, namely, solution of the resin and water was not stable but held that merely because solutions were not stable it did not mean that the resins produced by the appellants were not goods. The Collector (Appeals) agreeing with the finding that solutions were not stable allowed the appeals. It was held that an intermediate product in order to be excisable must be a product known to the market or commercial community; and that in the instant case even though the products were used for the manufacture of plastic laminated sheets and synthetic resin was formed as an intermediate product but it being unstable in a non-marketable condition the resin mixture could not be considered as excisable under tariff item 15 A(1) of Central Excise Tariff. In further appeal filed by the Department the Tribunal held that resins which occurred in three stages was nothing but resol at 'A' stage and resol being mentioned in item 15-A of Tariff Schedule it was covered by the 'chemical nomenclature' and, therefore, it was exigible to duty; that since, 'the products manufactured by 'appellants, fell under 15-A(1) the fact that these were not marketed or sold did not make any difference; and that "since it was not made out, 'that the product' was required to be taken into immediate use or otherwise it would have been rendered useless or it would cease to be resin" it was held that the product even though capable of, 'further condensation or polymerization' had reached, a definite stage of manufacture for a definite end use and, therefore, 'had to be held to be goods'. These appeals were filed against the decision of the Tribunal.The Department urged that resin or solution which was produced by the appellant was technically known as resols and resols being one of the items mentioned under item 15 A it was a specific item, exigible to duty and it could not further be required to satisfy the common parlance test specially because this was a chemical and not a product which was commonly bought and sold in the market; that once it was found that it was manufactured or produced then it should be deemed to have satisfied the test of marketability and consequently it was excisable goods within the meaning or the Act; that marketing capability depends on nature of goods and the test of marketability and capable of being marketed could not be applied to such goods as resol, it having been mentioned in item no. 15A.The question raised for consideration was whether various goods mentioned in the schedule of Excise Tariff are dutiable, as such or they would be, 'excisable goods' only when they are marketable or capable of being marketed. |
Judge | Hon'ble Mr. Justice R.M. Sahai |
Neutral Citation | 1995 INSC 112 |
Petitioner | M/s Moti Laminates Pvt. Ltd. Etc. |
Respondent | Collector Of Central Excise, Ahmedabad |
SCR | [1995] 2 S.C.R. 81 |
Judgement Date | 1995-02-14 |
Case Number | 80 |
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