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Central Excise duty on U.F. and P.F. solution for plywood manufacturing. Analysis: The writ petitioner sought relief from the levy of Central Excise duty on U.F. and P.F. solution used in plywood manufacturing. The petitioner argued that these solutions are intermediate inputs, not final products, and are not marketable. The petitioner contended that excise duty can only be levied upon goods removed from the factory, and since the solutions are used in-house, they should not attract duty. The petitioner also challenged the legality of certain provisions and notifications related to excise duty. During the proceedings, it was revealed that changes in tariff descriptions and notifications had brought the U.F. and P.F. solutions under the purview of Central Excise duty. The respondents argued that the solutions manufactured by the petitioner fell under the amended Tariff Item No. 15A(1) and were liable for duty as per the Finance Act, 1982. They supported their stance with a chemical test report from the National Test House. The court referred to precedents to determine the classification of the solutions for excise duty. It cited a Delhi High Court decision stating that a solution of resin may not always be considered an artificial or synthetic resin in liquid form. The court also highlighted a Supreme Court decision emphasizing that excise duty is applicable only to goods capable of sale to consumers, not intermediate products. Based on the arguments and legal principles, the court found that the U.F. and P.F. solutions were intermediate products used in plywood manufacturing and not subject to excise duty. The court allowed the writ petition, setting aside the orders and circulars related to excise duty on the solutions. It directed the annulment of assessment orders imposing duty on the solutions and ruled in favor of the petitioner. In conclusion, the court granted relief to the petitioner by declaring the U.F. and P.F. solutions non-liable for Central Excise duty and quashing relevant orders and circulars. The judgment emphasized the marketability and nature of the products in determining excise duty applicability, aligning with legal precedents and statutory provisions.
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