1990 (5) TMI 148 - AT - Central Excise

Summary

Issues:
- Whether recovery of Caprolactum amounts to manufacture and is excisable under Tariff Item No. 14-AA.

Analysis:
The appeal challenged an Order-in-appeal regarding the excisability of recovered Caprolactum under Tariff Item No. 14-AA. The appellants, engaged in Nylon yarn manufacturing, argued that the recovery process did not constitute manufacturing as no new product emerged and the recovered Caprolactum was not marketable. The lower authorities held the process as manufacturing, subject to excise duty. The appellants contended that recent legal developments emphasized marketability for excisability, citing relevant case law. The revenue argued that technological advancements and captive consumption justified duty imposition regardless of marketability.

Upon review, the Tribunal noted the focus on manufacturing activity without adequate consideration of marketability. Emphasis was placed on the necessity of proving marketability for excisability. The Department failed to demonstrate marketability, while the appellants presented evidence from a manufacturer stating the non-marketability of molten Caprolactum. Citing Supreme Court precedents, the Tribunal reaffirmed marketability as crucial for excisability, even for captively consumed items. The absence of evidence on marketability led the Tribunal to conclude that the goods were not dutiable under excise law. Consequently, the impugned order was set aside, and the appeal was allowed.