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Issues Involved:
1. Whether the goods manufactured by the petitioner are excisable. 2. Whether the petitioner is required to take out a licence under the Central Excise and Salt Act, 1944, even if the excise duty payable on the manufactured product is subject to executive exemption. Issue-wise Detailed Analysis: 1. Whether the goods manufactured by the petitioner are excisable: The petitioner manufactures tabular steel frames and chair angles for the Integral Coach Factory and Standard Motor Products of India Limited. The respondents argued that these products fall under Item 40 of the Central Excise Tariff, which covers "Steel furniture made partly or wholly of steel, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power, whether in assembled or unassembled condition." The petitioner contended that its products are not steel furniture and thus not excisable under Item 40. The court noted that the manufactured goods are not commercial products as they are fabricated to specific requirements and are not sold in the wholesale or retail market. The court emphasized that for goods to be excisable, they must be known to the market as commercial goods. The frames and angles manufactured by the petitioner are merely the base for the final product and do not constitute steel furniture in their existing condition. The court concluded that the goods in question do not fall under Item 40 of the First Schedule to the Central Excise and Salt Act, 1944. 2. Whether the petitioner is required to take out a licence under the Central Excise and Salt Act, 1944, even if the excise duty payable on the manufactured product is subject to executive exemption: The respondents argued that the petitioner is required to take out a licence under Section 6 read with Section 3 of the Act, notwithstanding the executive exemption from excise duty. Section 3(1) is the charging section, which mandates the levy and collection of excise duties on all excisable goods produced or manufactured in India. Section 6 stipulates that certain operations related to the manufacture of excisable goods require a licence, provided there is a notification in the Official Gazette specifying such operations. The court observed that although the goods manufactured by the petitioner are component parts of steel furniture, there was no notification by the Central Government mandating a licence for the manufacture of such components. The court held that in the absence of such a notification, the respondents lacked the authority to compel the petitioner to take out a licence. Therefore, the petitioner was not obligated to take out a licence under the provisions of the Act. Conclusion: The court ruled in favor of the petitioner on both issues. The goods manufactured by the petitioner are not excisable under Item 40 of the First Schedule to the Central Excise and Salt Act, 1944. Additionally, the petitioner is not required to take out a licence for the manufacture of the goods in question due to the absence of a specific notification mandating such a licence. The writ petition was allowed with costs.
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