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Issues: Classification of glass fibre as excisable goods under the Central Excises and Salt Act, 1944 based on marketability and comparability with a similar case.
Analysis: 1. Classification of Goods: The Petitioner manufactures various items using glass fibre and clears them under Item 22F of the Act. The Assistant Collector contended that the Petitioner also manufactures glass fibres as an intermediary product, which was not reflected in the classification list. 2. Marketability of Glass Fibre: The Petitioner argued that the glass fibre is an intermediate product arising in a continuous process and is not a marketable commodity, hence not liable for excise duty. Reference was made to the marketability test established in previous judgments like Bhor Industries Ltd. v. Collector of Central Excise and FGP Ltd. v. Union of India, emphasizing that goods must be marketable to be subject to excise duty. 3. Comparative Case: The Petitioner highlighted a similar case involving M/s. FGP Ltd. where the Assistant Collector had accepted that glass filament at certain stages was not marketable and thus not subject to excise duty. The Petitioner argued discrimination in treatment based on this precedent. 4. Affidavit Evidence: An affidavit filed by the Petitioner emphasized that the glass filament produced was not marketable due to technical reasons related to its processing and chemical applications. The Petitioner disputed findings suggesting marketability based on another affidavit and consultant's statements. 5. Judgment: The Court considered the marketability aspect crucial for excisability, citing previous judgments reinforcing this principle. The Respondents failed to effectively counter the argument that glass fibre was not marketable, leading to the conclusion that the Petitioner's product was not exigible to excise duty. The Court also noted the lack of denial regarding a similar case, further supporting the decision to set aside the order and rule in favor of the Petitioner. 6. Conclusion: The High Court allowed the writ petition, setting aside the order subjecting the glass fibre manufactured by the Petitioner to excise duty. The judgment emphasized the importance of marketability in determining excisability and highlighted the lack of response from the Respondents regarding the comparability with the case of M/s. FGP Ltd.
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