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Issues Involved: Whether Central Excise duty is chargeable on tyres destroyed during testing by a company.
Summary: The appeals involved the issue of whether Central Excise duty is applicable on tyres destroyed during testing by a company. The Appellants argued that the tyres were only marketable after testing, citing various decisions supporting their stance. The Department, however, contended that duty is payable as soon as goods are manufactured, even if for testing purposes, and referenced specific rules and previous cases to support their position. Upon considering the arguments, the Tribunal acknowledged that testing is crucial for making goods marketable, as established in previous decisions. They highlighted the Supreme Court's ruling that destroyed goods during quality control testing are not subject to Excise duty. The Tribunal rejected the Department's assertion that tyres were marketable before testing, emphasizing the necessity of testing to ensure product quality. Consequently, the Tribunal ruled in favor of the Appellants, stating that no duty is chargeable on tyres destroyed during testing, and allowed both appeals.
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