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TMI Blog1985 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... hat M/s. Mettur Chemicals Industrial Corporation Ltd. (the appellants) addressed a letter on 11-7-1977 to the Assistant Collector of Central Excise, Salem stating that they proposed to use cell liquor from their Plant I at Mettur Dam for purification of brine in their Plant II at Veerakkalpudur in order that more rayon grade caustic soda might be available for sale. It was further stated that this cell liquor contained approximately 100-140 gms. per litre of sodium hydroxide and 170-200 gms. per litre of undecomposed sodium chloride and was produced in the intermediate stage in the manufacture of commercial grade caustic soda. The cell liquor was not a saleable commodity because of the very high content of sodium chloride in it. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs under Section 35A(2) of the Central Excises and Salt Act (hereinafter called the Act), as it stood then, formed the tentative view that the margin of profit on the cell liquor captively consumed by the appellants should be added to its cost of production in the price list No. 6/77. The Collector said that had the goods been sold, some margin of profit would have been included in the selling price. No sale need in fact take place for the purpose of Valuation Rule 6(b)(ii). The profit had to be based on the profit, if any, shown in the balance sheet. On this basis, he issued a notice dated 19-12-1980 proposing to revise the Assistant Collector s order so as to include the margin of profit of the relevant year in the assessable value for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g profit margin for determination of assessable value in terms of Valuation Rule 6(b)(ii); (iv) even if profit margin was to be added, it could not be the over-all profit margin of the appellants. 7. Taking up point (i), the learned Counsel drew our attention to the booklet The Story of Mettur Chemicals which described the appellants manufacturing process at pages 11-15 thus- * * * We are concerned with the product known as cell liquor containing 10-11% caustic soda as against commercial lye which, according to the booklet, consists approximately of 50% caustic soda. According to the Counsel, cell liquor is not goods -it has no distinct character or name. Its only use is in lye-production. 8. As regards point (ii). It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court decision in the Union Carbide India Ltd. case 1978 E.L.T. J 1 and the Calcutta High Court decision in Union Carbide Company Ltd. case - 1978 E.L.T. J 180. As regards point (iii), the learned Senior Departmental Representative submitted that the saleability was not an important consideration. The profit margin on caustic soda sold by the appellants should, however, be taken into account. 12. We have carefully considered the submissions of both sides. The crux of the dispute is whether the cell liquor is caustic soda lye for the purpose of Item No. 14-B, CET. If it is not, then, nothing else survives for consideration. On this point, the appellants literature indicates that the subject cell liquor is a weak solution of 10-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not, therefore, fall for classification under Item No. 14-B, CET. 14. The two decisions cited, one of the Allahabad High Court and the other of the Calcutta High Court are, in our opinion, not applicable to the facts of the present case. In the Allahabad decision, the Court said that the fact that a product may not be known to the general public or to the traders in general would not change the position and that the test of general marketability did not appear to be sound. In the Calcutta High Court decision, the Court said that it was not necessary that goods should be sold or were saleable to attract the excise duty. We have come to the finding that the goods in the appeal before us is not caustic soda lye. It would not, therefore, fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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