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2001 (9) TMI 190 - AT - Central Excise
Issues:
1. Whether duty is payable on electric bulbs used for testing purposes after being fully manufactured and ready for dispatch. Analysis: The case involved a dispute regarding the leviability of duty on electric bulbs used for testing purposes after being fully manufactured and ready for dispatch. The Revenue contended that duty was payable on the bulbs as they were in fully marketable condition and only one or two bulbs were selected for testing out of a lot fit for marketing. The Revenue relied on a previous Tribunal decision to support their argument. On the other hand, the respondent argued that the bulbs were destroyed during mandatory quality control tests within the factory premises and, therefore, should not be considered as excisable goods manufactured. The respondent cited previous Tribunal decisions and an Apex Court ruling to support their position. The Tribunal, after considering the submissions from both parties, analyzed the facts of the case. It was noted that the bulbs were selected for quality control tests from each lot at the time of clearance but did not leave the factory premises. These selected bulbs were destroyed during the testing process, rendering them no longer fully manufactured for the purpose of levy of excise duty. The Tribunal held that since the bulbs were not cleared from the factory and were destroyed during testing, they were not liable for duty. The Tribunal upheld the order passed by the Commissioner (Appeals) and rejected the appeal filed by the Revenue. In conclusion, the Tribunal ruled that duty was not payable on the electric bulbs used for testing purposes after being fully manufactured and ready for dispatch. The destruction of the bulbs during quality control tests exempted them from being considered as excisable goods for the purpose of levy of excise duty. The decision was based on the specific circumstances of the case where the bulbs were destroyed before leaving the factory premises, thus absolving them from duty liability.
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