1998 (1) TMI 136 - AT - Central Excise

Summary

Issues:
Classification of "carded gilled silvers wholly of wool" under Item 43 of the Central Excise Act, 1944. Consideration of marketability and classification as goods for excise duty purposes.

Detailed Analysis:

1. Classification Issue:
The appeal stemmed from the Order-in-Appeal confirming the classification of "carded gilled silvers wholly of wool" under Item 43 of the Central Excise Act, 1944. The Assistant Collector's detailed order included a chemical test confirming the composition of the sample and a physical verification visit to the factory. The presence of gill boxes in the manufacturing process was crucial to the classification. The Assistant Collector concluded that the item fell under Tariff Item 43, making it excisable to duty.

2. Appellants' Argument:
The appellants argued that their evidence, including the request for a factory visit to confirm the absence of gill boxes, was not adequately considered. They contended that the item was not marketable in its intermediate stage and therefore should not be classified as goods for excise duty.

3. Marketability and Legal Precedents:
During arguments, references were made to judgments by the Delhi High Court and Bombay High Court regarding the marketability of similar products. The Delhi High Court, in a specific case, emphasized that marketability is essential for an item to be considered dutiable under the excise law, even if it falls within the tariff schedule. The High Courts' decisions, along with the dismissal of a Special Leave Petition by the Supreme Court, supported the argument that the item in question was not marketable, not considered goods, and hence not excisable.

4. Decision and Legal Precedents:
After careful consideration, the Tribunal noted that the issue of marketability and classification as goods had been settled by the Bombay High Court and Delhi High Court judgments. The Tribunal followed the legal precedent established by these judgments and the Supreme Court's dismissal of the Special Leave Petition. Consequently, the impugned order classifying the item as excisable goods under Item 43 was set aside, and the appeal was allowed based on the non-marketability and non-goods classification of the item.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, legal precedents cited, and the final decision reached by the Appellate Tribunal CEGAT, New Delhi.