1997 (5) TMI 49 - SC - Central Excise

Whether the Moti Laminates judgment 1995 (2) TMI 67 - SUPREME COURT OF INDIA requires to be looked into again? Held that - The view expressed in the Moti Laminates judgment is based on earlier judgments and it lays down the correct law. The order of the Collector shows that the calcium carbide that was manufactured by the respondent for further utilisation in the production of acetylene gas was not of a purity that rendered it marketable nor was it packed in such a way as to make it marketable, that is to say, in airtight containers. This is a finding of fact. Applying the ratio of the Moti Laminates judgment thereto, we must hold that the calcium carbide manufactured by the respondents is not excisable. The commodity which is sought to be made liable to excise duty must be a commodity that is marketable as it is and not a commodity that may by further processing be made marketable. Against assessee.

Summary

Issues:
1. Whether the manufactured calcium carbide is excisable.
2. Whether the calcium carbide is marketable.
3. Interpretation of Tariff Entry 14AA(1) for excise duty.

Analysis:

The case involved a dispute regarding the excisability and marketability of calcium carbide manufactured by the respondent company. The respondent argued that the calcium carbide was not excisable as it was an intermediate product used for generating acetylene gas in their factory. The Appellate Collector and the Government of India upheld that the calcium carbide was excisable, leading to a writ petition before the Delhi High Court, which ruled in favor of the respondent, stating that the manufactured calcium carbide was not marketable.

Upon appeal to the Supreme Court, the bench referred to the Moti Laminates judgment, emphasizing that goods not marketable or acceptable in the commercial market should not be subjected to excise duty. The Court delved into the definition of excisable goods and the requirement of marketability for levy of excise duty, citing various precedents to support the argument that excise duty is linked with production of marketable goods.

The Court analyzed the findings in the Moti Laminates judgment and subsequent cases, affirming the principle that excisable goods must be marketable. The appellant contended that the calcium carbide was marketable based on previous orders, but the Court held that the manufactured calcium carbide, not meeting purity and packaging standards for marketability, was not excisable.

Regarding Tariff Entry 14AA(1), the appellant argued that any further processing of the calcium carbide should not affect its excisability. However, the Court disagreed, emphasizing that the commodity must be marketable as is, without requiring additional processing for market acceptance. Consequently, the appeal was dismissed with no costs awarded.

In a separate judgment, Civil Appeal Nos. 4443-4444 of 1985 were dismissed for lack of prosecution, with no costs imposed. Similarly, in Civil Appeal No. 2062 of 1979, the application for intervention was dismissed, and the appeal was also dismissed.