1997 (1) TMI 81 - SC - Central Excise

Summary

Issues involved: Determination of excise duty liability on Acetylene gas emerging during manufacturing process.

Summary:
The Supreme Court granted special leave in Special Leave Petitions (SLPs) where the appellant-Company manufactures Trichloroethylene and uses Acetylene gas in the process. The question was whether this Acetylene gas is liable to excise duty under Tariff Item 14H(vi). The contention was that the gas in crude form was not marketable, thus not liable for duty. The Court emphasized the need for a clear finding on the marketability of the gas, as per the recent judgment in Moti Laminates Pvt. Ltd. & Ors. v. Collector of Central Excise. Since no such finding was recorded, the matters were remitted to the CEGAT for examination. The Tribunal was directed to specifically determine the marketability of Acetylene gas in its current form. The appellant was allowed to present additional evidence on this issue if deemed acceptable by the Tribunal. A related Writ Petition was withdrawn in light of the order passed in the appeals, with no costs awarded.

This judgment highlights the importance of establishing the marketability of goods for excise duty liability, as per the relevant Tariff Item, and the necessity for authorities to record clear findings on such crucial issues to determine tax obligations accurately.