2002 (7) TMI 134 - AT - Central Excise

Summary

Issues:
Dutiability of sub-assemblies (PCB-Populated Circulated Boards) for EVM (Electronic Voting Machines) - Marketability and capability of being marketed.

Analysis:
The issue at hand pertains to the dutiability of sub-assemblies, specifically PCB-Populated Circulated Boards used in Electronic Voting Machines (EVMs). The central question is whether these items are marketable or capable of being marketed. The appellant's counsel argued that the product is solely for captive consumption and not intended for sale in the market. They relied on a previous tribunal ruling emphasizing that while marketability is essential for excisability, actual marketability is not a prerequisite for dutiability. The Commissioner's finding that the goods are not ordinarily bought and sold in the market further supported the appellant's stance. Additionally, a Supreme Court decision was cited to reinforce the argument that goods produced solely for captive consumption may not attract duty unless they are marketable or capable of being marketed.

On the contrary, the opposing party contended that the goods in question are capable of being marketed, citing a specific finding in the impugned order. They referenced a Supreme Court decision where the absence of a shelf life led to a determination of non-marketability. The crux of their argument was that the exemption claimed did not apply to the sub-assemblies in question.

The Tribunal carefully considered the matter and reiterated the established principle that marketability is a prerequisite for excisability. Goods must either be marketed or capable of being marketed to attract excise duty. Given that the sub-assemblies were only captively consumed and not brought to the market for sale, coupled with the Commissioner's explicit finding that they are not goods ordinarily traded, the Tribunal found no merit in the Revenue's arguments. Consequently, the appeal was allowed with any consequential relief.

In a concurring assent, another Member agreed with the reasoning and findings of the Commissioner regarding the non-marketability of the Populated Circuit Boards (PCBs) in question. No evidence was presented to challenge this determination, leading to the conclusion that no duty demand could be justified under any Tariff Heading.

Furthermore, the judgment delved into the classification of Printed Circuit Boards, distinguishing between Populated Circuit Boards and Printed Circuit Boards. It was established that Populated Circuit Boards, if marketable, would fall under a specific heading, and the duty demand made under an incorrect heading was deemed unsustainable. The classification dispute was settled, affirming that the duty demand under the incorrect heading for the Populated Circuit Boards used in EVMs was misdirected.

In conclusion, the appeal was allowed with consequential relief, emphasizing the importance of marketability in determining dutiability and clarifying the correct classification for the Populated Circuit Boards in question.