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TMI Blog1999 (11) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the same is recoverable from them under Rule 9(2) of the said Rules; ORDERED Having regard to the discussion and findings above I pass the following order : (i) I confirm the demand of Central Excise duty Rs. 2,55,31,179.70 (Rs. Two crore fifty five lacs thirty one thousand one hundred seventy nine and paise seventy only) against M/s. Metro Tyres Ltd., B-27, Focal Point, Ludhiana, Rs. 2,80,60,571.23 (Rs. Two crore eighty lacs sixty thousand five hundred seventy one and paise twenty three only) against M/s. Ralson (India) Ltd., G.T. Road, Ludhiana, Rs. 51,57,604.29 (Rs. Fifty one lakhs fifty seven thousand six hundred four and paise twenty nine only) against M/s. Poddar Tyres Ltd., Jugiana, Ludhiana, Rs. 1,82,03,994.00 (Rs. One crore eighty-two lakhs three thousand nine hundred ninety four only) against M/s. Govind Rubber Ltd., Unit No. I, G.T. Road, Ludhiana and Rs. 86,13,774.10 (Rs. Eighty six lacs thirteen thousand seven hundred seventy four and paise ten only) against M/s. Govind Rubber Ltd., Unit No. IV, Focal Point, Ludhiana under Rule 9(2) of the Central Excise Rules, 44 and direct them to pay the same immediately. (ii) However, in the circumstances of the cases, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted. In reply to the SCN, the appellants submitted that at no stage in the process of preparation of tyre, cotton cord/fabrics comes into existence: that it was a pre-requisite that there must be a fabric which may become a rubberised textile fabric after being subjected to the process of rubberisation; that tyre cord does not have any weft and, therefore, it cannot be described as fabrics; that no evidence has been produced that tyre cord is a fabric. It was argued that product in this case has no shelf life, is not marketable and that the burden was on the Department to prove that the goods are marketable. It was contended that since there was no proof of marketability the product cannot be treated as goods for charging duty under Section 3 of the Central Excise Act. It was contended that for charging duty under Chapter 59 only these fabrics would be qualified in which the textile materials pre-dominate over other materials; that in their case the rubber element is 64% as against 36% of cotton contents. In support of this contention they cited the judgment of the Hon'ble Bombay High Court in the case of MRF v. Union of India reported in 1985 (22) E.L.T. 5. It was also submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble High Court expressed similar view on marketability etc. Ld. Counsel also referred to the judgment of the Hon'ble Delhi High Court in the case of Bata India Ltd. v. U.O.I. reported in Writ Petition No. 606 of 1970 and submitted that the Hon'ble High Court held that intermediate goods which are not bought and sold in the market are not goods for purpose of Section 3 of the Central Excise Act. Ld. Counsel referred to the judgment of this Tribunal in the case of Bharat Electronics v. C.C.E. reported in 1993 (67) E.L.T. 140 and submitted that intermediate product are not liable to duty if they are not marketable. He cited some other case law in support of his contentions. Ld. Counsel cited and relied upon the decision of the Apex Court in the case of U.O.I. & Others v. DCM reported in 1977 (1) E.L.T. (J 199). In this case the Apex Court held that excise duty is on the manufacture of goods and not on their sale. Therefore, the fact that a substance is produced at an intermediate stage and is not to be in the market would not make any difference. The Apex Court further held that to become goods an article must be something which can ordinarily come to the market to be bought and sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that comes into existence as an intermediate product if it is not marketable and therefore, not chargeable to duty. Summing up the argument Ld. Counsel submitted that since the product has a short shelf life, cannot be allowed to remain idle for longer duration as curing, sets in the process and the fact that it is not marketable, it is not goods and leviable to duty. He, therefore, prayed that the appeals filed by the different parties may be allowed. 6. Shri K. Srivastava, Ld. DR appeared for the Revenue reads obviously from the impugned order. He submits that shelf life supported by expert opinion and affidavits has been dealt with by the Ld. Commissioner. He submits that marketability is one of the aspect, which has been dealt with in the order appealed. He submits that the product is a specified product in the Tariff and the process undertaken by the appellants is a process of manufacture; that all these aspects have been gone into in detail in the impugned order. He reiterates the findings of the Ld. Commissioner and submits that the order is very detailed one discussing each aspect and coming to a reasoned conclusion. He, therefore, submits that in view of the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buying and selling. The expert's, opinion and the affidavits clearly showed that curing takes place even at room temperature and once the surface gets cured it loses its binding character. Thus from these affidavits and the expert opinion, we can say that the shelf life of the product is short so as to store the product and bring it to the market for the purpose of sale and purchase. 10. The other point is marketability. The Apex Court in the case of Moti Laminates held that intermediate goods produced and used for captive consumption are not liable to duty if not marketable notwithstanding the fact of being specified in Tariff Schedule. 11. Marketability is dependent on the shelf life. Shelf life undoubtly of the product according to the affidavits and expert opinion ranges between 3-4 hours to 24 hours. The admitted position is that rubberised cotton cord/ fabric is captively consumed in the manufacture of tyre. Thus, captive consumption is not in dispute, therefore, the important factor for determination is whether the goods are marketable. Marketability is required to be proved by the Department. According to the affidavits and expert opinion, the goods are not mark ..... X X X X Extracts X X X X X X X X Extracts X X X X
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