1983 (12) TMI 288 - AT - Central Excise

Summary

Issues:
1. Whether the product "EMULSIFIER T" manufactured by the appellants was excisable under the Central Excises and Salt Act.
2. Whether the product constituted excisable goods under Item No. 15AA of the Central Excise Tariff Schedule.
3. Whether the production process of "EMULSIFIER T" amounted to manufacture.
4. Whether the product being produced only for captive consumption exempted it from excise duty.
5. Whether the product not being marketed affected its classification as excisable goods.

Analysis:

Issue 1:
The dispute centered around whether "EMULSIFIER T" manufactured by the appellants was excisable under the Central Excises and Salt Act. The Assistant Collector held the product as excisable under Item No. 15AA of the Central Excise Tariff Schedule, which the appellants contested, arguing that it was an intermediate product and not a finished product.

Issue 2:
The appellants contended that "EMULSIFIER T" was an intermediate product processed for use in the manufacture of speciality oils and was not marketed or intended for sale. However, the Deputy Chief Chemist's test report classified the product as an organic surface active agent falling under Item No. 15AA of the CET. The tribunal upheld this classification, emphasizing that the product's nature as an emulsifier made it excisable goods.

Issue 3:
The tribunal examined whether the production process of "EMULSIFIER T" constituted manufacture. Despite the appellants' argument that it was an intermediate product, the tribunal held that if a product is specifically included in the Central Excise Tariff Schedule, its classification as excisable goods cannot be questioned based on the manufacturing process.

Issue 4:
Regarding the contention that the product was produced only for captive consumption, the tribunal cited a Madras High Court decision stating that the Act does not differentiate between goods manufactured for sale or consumption, affirming that the product's purpose did not exempt it from excise duty.

Issue 5:
The appellants also argued that since the product was not marketed, it should not be classified as excisable goods. However, the tribunal reiterated that the product's classification as an organic surface active agent under Item No. 15AA of the CET rendered it liable for excise duty irrespective of its marketing status.

In conclusion, the tribunal rejected the appeal, upholding the classification of "EMULSIFIER T" as excisable goods under Item No. 15AA of the Central Excise Tariff Schedule, emphasizing that its nature as an emulsifier determined its liability for excise duty, regardless of its intended use or marketing status.