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TMI Blog1988 (5) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured by the appellants are goods or otherwise. It is observed that these are the plastic shells obtained out of the HDPE Granules supplied by the Universal Luggage Mfg. Co. They have got specific application. It is an admitted fact that they do not come into the market for being bought and sold. These shells cannot be used for any other purpose. They can only be used for the plastic moulded luggage manufactured by M/s Universal Luggage Mfg. Co. Ltd. There is also considerable force in the appellants argument that a particular shell can be used by the manufacturer, viz. M/s Universal Luggage Mfg. Co. for a particular types, shape, size and colour of plastic moulded luggage. It is a fact that shells have specific application and they can be used only in the Plastic Mould Luggage of Universal Luggage Manufacturing Company, and that too for particular type, shape, size and colour of such luggage. In my opinion, whatever shells manufactured by both the appellants are not goods as they do not ordinarily come to the market to be bought and sold which is the necessary ingredient, which should be present in the particular type of goods. In the absence of such ingredient the shells ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83. He argued that the Assistant Collector visited the factory of the respondents and came to the conclusion that the Supreme Court reversed the order in Union Carbide of India Limited as reported in Union Carbide of India Ltd. v. Union of India and Others 1986 (24) E.L.T. 169 (S.C.). The learned Advocate also referred to a judgment of Geep Industrial Syndicate Ltd. v. Central Government Others reported in 1987 (31) E.L.T. 865 (S.C.). He emphasised that the appellants received the mould, raw materials, and specifications from Universal and there was no sale of the goods by the respondents to Universal. He further submitted that the appellants letter, dated 24th March, 1982 to the Assistant Collector was neither confirmed nor denied. In this letter it was recorded that after the Assistant Collector inspected the respondents factory, the Assistant Collector confirmed that the luggage shells were not excisable products. He, however, made an alternate submission that if the shells are treated as goods, Rule 56A may be extended to the same. This request was opposed by the learned JDR. 6. We have considered the arguments of both sides. The first question to be decided is whether or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought and sold , a definition which was reiterated by this Court in South Bihar Sugar Milts Ltd., etc. v. Union of India Ors. - (1968) 3 S.C.R. 21 = 1978 E.L.T. J 336 (S.C.). The question here is whether the aluminium cans manufactured by the appellant are capable of sale to a consumer. It appears on the facts before us that there are only two manufacturers of flashlights in India, the appellant being one of them. It appears also that the aluminium cans prepared by the appellant are employed entirely by it in the manufacture of flashlights, and are not sold as aluminium cans in the market. The record discloses that the aluminium cans, at the point at which excise duty has been levied exist in a crude and elementary form incapable of being employed at that stage as a component in a flashlight. The cans have sharp uneven edges and in order to use them as a component in making flashlight cases the cans have to undergo various processes such as trimming, threading and redrawing. After the cans are trimmed, threaded and redrawn they are reeded, beaded and anodised or painted. It is at that point only that they become a distinct and complete component, capable of being used as a fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents are not goods liable to excise duty. We, therefore, dismiss the two appeals. In the circumstances, we do not go into the other questions. (I.J. Rao) (S. D.Jha) Member (T) Vice President (J) Dated 15-2-1988 10. [Per: V.P. Gulati, Member (Technical)]. -1 do not agree with the decision of the learned Brothers Sh. S.D. Jha, Vice-President and Sh. I.J. Rao, Member. It is seen from the facts on record that respondents received the H.D.P. granules from M/s Universal Luggage Manufacturing Co. and the respondents subjected these granules to the manufacturing process and produce moulded plastic shells. These shells, after manufacturing are returned to M/s Universal Luggage Manufacturing Co. who ultimately make suitcases/travel goods using these as components for the same. 11. During the course of the hearing, the learned Advocate for the respondents, Sh. Motashaw, informed that the moulded shells that the factory sends to the Universal Luggage Manufacturing Co. undergo no further process of manufacture as such. The shells on receipt are tested for size by M/s Universal Luggage v. Lanufacturing Co. by putting them on a mould of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon ble Supreme Court as to the nature of the cans which were sought to be levied Central Excise duty. The same for convenience of reference are reproduced below - The record discloses that the aluminium cans, at the point at which excise duty has been levied, exist in a crude and elementary form incapable of being employed at that stage as a component in a flashlight. The cans have sharp uneven edges and in order to use them as a component in making flashlight cases the cans have to undergo various processes such as trimming, threading and redrawing. After the cans are trimmed, threaded and redrawn they are reeded, beaded and anodised or painted. It is at that point only that they become a distinct and complete component, capable of being used as a flashlight case for housing battery cells and having a bulb fitted to the case. We find it difficult to believe that the elementary and unfinished form in which they exist immediately after extrusion suffices to attract a market". 14. It is seen that in that case, the cans as these were extruded were not capable of any use as such and these required to be subjected to further processes for becoming useful. The position in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Mr. Jain to the effect that the petitioner company had imported air tight metal containers from West Germany and that these containers were not available in India under the present conditions and it was commercially not possible to take the same from the market. The argument was that as the petitioner company was not in a position to market and sell the polymer chips obtained by the petitioner, it would not attract the excise duty because the duty imposed is in the very nature of things to be imposed on the goods. It was contended that in order that a commodity should be goods it should be something known to the market it would not attract the excise duty. Reliance for this proposition was sought from Union of India and Another v. Delhi Cloth and General Mills Co. Ltd. and Others (1987 E.L.T. J 177) = (AIR 1963 SC 791) and South Bihar Sugar Mills Ltd. and Another v. Union of India and Another (1978 E.L.T. J-336) (AIR 1968 SC 922) where the Lordships of the Supreme Court observed that by very words of the Central Excises and Salt Act, 1944, excise duty is leviable on goods but as the Act does not define the goods but defines the excisable goods, the meaning of the goods may be ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that it did not attract the excise duty. Similarly in the case of South Bihar Sugar Mills (supra), it was found that the kiln gas produced by the petitioner company was not known as carbon dioxide in the market and therefore the imposition of duty under the head compressed liquefied or solidified gases was not covered. Reference was also made to a decision of Tarkunde J of Bombay High Court in Cosmos India Rubber Works Pvt. Ltd. and Another v. G. Koruthu, Collector of Central Excise and Another (Misc. Petition No. 401 of 1963) decided on 10-3-1966. In that case the company manufactured hose pipes and purchased cotton fabrics as one converted into frictioned clother. Excise duty was levied on the cotton fabrics purchases by the company before the fabrics was subjected to a process. The department however sought to impose levy claiming it to be covered under Item 19 of the First Schedule to the Central Excises and Salt Act, 1944. His Lordships found that the frictioned cloth cannot be regarded as a finished cotton fabrics and cannot be placed in the market. His Lordships also found that this product was not marketed nor was it marketable and, therefore, cannot be cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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