1997 (1) TMI 329 - AT - Central Excise

Summary

Issues:
1. Excisability and dutiability of steel wire cages used in manufacturing reinforced concrete cement pipes.
2. Whether steel cages are marketable goods for the purpose of Central Excise Law.
3. Classification of steel cages under the Central Excise Tariff.
4. Eligibility for Modvat credit on steel cages.

Analysis:
1. The appeal concerned the excisability and dutiability of steel wire cages used in manufacturing reinforced concrete cement pipes. The Collector of Central Excise (Appeals) Bombay had held that the steel cages were not marketable goods and were considered as intermediate products, not falling under the purview of Central Excise Law.

2. The Revenue contended that the steel cages were identifiable marketable commodities with a specific use in pipe manufacturing. They argued that paying duty on the steel cages and availing Modvat benefits indicated their marketability. On the other hand, the Respondent argued that the steel cages were not sold outside but consumed internally within the manufacturer's units.

3. The Tribunal observed that the steel cages were essential for manufacturing reinforced concrete pipes and were movable goods, part of which were transferred to another unit of the same manufacturer. The Tribunal emphasized that excisable goods need not be sold in the market; being marketable is sufficient. The Tribunal noted that the manufacturer was paying excise duty on the steel cages since 1986 and availing Modvat benefits, indicating their excisability.

4. The Tribunal disagreed with the Collector's view that the steel cages were semi-finished structures and not marketable goods. It was highlighted that the steel cages were separately produced and transferred to another unit, indicating marketability. The Tribunal also noted that the steel cages were classified under the old Central Excise Tariff and were eligible for Modvat credit, supporting their excisability.

5. The Respondent sought Modvat credit benefits if the steel cages were deemed excisable. The Tribunal agreed that if the Respondent was eligible for Modvat credit, they could apply to the jurisdictional officers. The Tribunal held that denying Modvat credit solely because it was not applied for during the relevant period would be unfair. Consequently, the appeal by the Revenue was allowed, granting the benefit of Modvat credit to the Respondent.