9911796707
TMI Blog1999 (7) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... tated the facts are that the Appellants manufacture the following bulk drugs: (i) Memben Dazole (ii) Trimethoprim (iii) Tinidazole (iv) Dexamethasone 2.2 During the process of manufacture of these bulk drugs, the following intermediate products arise. (i) Thiourea Derivatives (ii) 3-4 Diamino Benzophenone (iii) Anilino Compound i.e. 3-4-5 Trimethoxy Benzaledene Alinino Propionitrile (iv) Brown Oil i.e. Ethyl (2-2 Methyl-5-Nitro-l-Imidazolyl) Ethyl Sulphide (v) Epoxy Derivatives (Epoxy) 17-21 Dihydroxy 16-Alpha-Methyl-9, 11, Epoxy Progna-1, 4-Diono-3, 20 Diono Epox. 2.3 A show cause notice dated 3-7-1989 was issued to them for demanding duty on these 5 products manufactured an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of bulk drugs; that these were not isolated from the process for the purpose of due refinement and standardization but were captively consumed for further manufacture of the bulk drugs in the state they arose. The ld. Advocate, relied on the following decisions : (a) Bhore Industries Ltd. v. C.C.E. - 1989 (40) E.L.T. 280 (S.C.) (b) Union Carbide India Ltd. v. U.O.I. - 1986 (24) E.L.T. 169 (S.C.) (c) C.C.E. v. Ambalal Sarabhai Enterprises - 1989 (43) E.L.T. 214 (S.C.) 3.2 The ld. Counsel contended that according to these judgements, marketability of the product has to be established first and the Tariff entry is to be looked into later; that unless the Department proves that these intermediate products in the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purpose of Section 3. It is not also necessary that the goods in question should be generally available in the market." Drawing our attention to the impugned order, the ld. DR mentioned that the production of all the impugned products were recorded by the Appellants; these products were kept in containers stored till they were required for captive use; these goods were weighed and weight was recorded in the log sheet in the plants; that Shri S.C. Manakiwal, Dy. Chief Executive of Research and Development of the Appellants, had stated in his statement that in the log sheets mentioned in the plant, they were showing the date of Brown oil separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a complete different context for ascertaining the correct classification under item 68 of the erstwhile Central Excise Tariff. 6. In reply, the ld. Advocate submitted that as the Appellants exercised a completed in-process production check and quality control, these goods were weighed and recorded in the log sheets; that this fact in no way establishes that the products were marketable; that the products were put in plastic cans just for the purpose of weighment because they did not have an automatic arrangement for weightment of the in-process materials; that the character and properties of the products purchased from market were entirely different from their products. 7. We have gone through the submissions of both the sid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brown oil) is a mixture of two isomers (i.e. 2 (Ethyl-sulphenyl) -2 methyl 5 nitro - imidezole and 2- (othyl sulphanyl) - 2 methyl 4 nitro - imidezol having a definite Molecular weight and molecular and structural formula. Thus the sample (brown oil) appear to be a separate chemically defined organic compound - Hetro cyclic compound with nitrogen .... items in terms of chapter note 1(b) of Chapter 29 of Central Excise Tariff. However, the laboratory does not have facility to establish its identity. 5. Epoxy Darivatives,, (Epoxy) 17-21 Dihydroxy 16-Alpha-Methyl - 9,, 11,, Epoxy - ....-1,, 4-Dione-3,, 20-Dione Epox. "The sample is in the form of light yellow coloured powder. It is a organic compound." "Note" : On the basis of write- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rting the findings of the Collector. The concept of being known to the market is important not from the point of view whether the goods are sold as such but from the point of view whether the goods are manufactured as such. The fact that the goods are not actually sold in the market would not make any difference since excise duty is leviable on the manufacture of goods and not on their sale. Actual sale is not an essential ingredient for goods to be excisable. This was the view of the Apex Court even in C.C.E. v. Ambalal Sarabhai Enterprises (supra). As contended by the ld. DR the Supreme Court in A.P. State Electricity Board's case, supra, held that marketability is essentially a question of fact to be decided in the facts of each case. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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