2001 (5) TMI 305 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 214/86 regarding exemption of duty on goods manufactured in a factory on job work.
2. Application of Notification No. 63/93 exempting body building from payment of duty.
3. Determination of marketability of fabricated items by the sheet metal division for excise duty purposes.

Analysis:
1. The appellant claimed the benefit of Notification No. 214/86 for exemption from duty on the fabrication of shapes and sections by its sheet metal division used in manufacturing bus bodies. The Department contended that since excise duty was not leviable on the final product during a specific financial year due to Notification No. 63/93, the benefit of the earlier notification was not applicable. The Asstt. Commissioner upheld this view, but the Commissioner (Appeals) favored the appellant's argument, emphasizing the marketability of the fabricated items made on job work. The matter was remanded to verify the marketability of each item.

2. The Dy. Commissioner concluded that the fabricated items were not marketable as they were made out of raw materials supplied by the bus body division and could not be sold in the market. Consequently, the demand was dropped. However, the Department appealed, asserting that a market existed for the items as they were distinct and had a specific use. The Commissioner (Appeals) agreed, highlighting that the fabricated items were essential for the manufacturing process of bus bodies, and their marketability was deemed due to their subsequent use in the final product.

3. The Tribunal observed that the question of marketability had not been adequately addressed at any level. It emphasized the distinction between manufacture and marketability, stating that the mere process of manufacture does not automatically render goods marketable. The Tribunal highlighted that for goods to be liable for excise duty, they must be capable of being bought and sold in the market. As both parties agreed, the matter was remanded to the adjudicating authority for a detailed determination of marketability, allowing the presentation of fresh evidence before a final decision is made. Consequently, the appeal was allowed, and the previous order was set aside.