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TMI Blog2007 (7) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... fically exempted under Notification No. 88/93 dated 4-5-1993. However, for the period 28-2-1993 to 3-5-1993 no exemption was available for parts at wagons. The impugned orders have been passed in respect of two items, namely Underframe and Covered Type Containers, holding that both these items are parts of wagons and chargeable to duty during the impugned period. 3. The appellants in their appeals have described these two products as follows :- Underframe During the course of manufacture of wagons, a frame like skeleton is prepared bit by bit with the help of iron and steel materials such as angles, channels, plates, sheets and sections and with the help of various bought out items. The iron and steel materials are cut to required shapes and sizes and are subjected to various processes like bending, drilling, shaping, etc. During the process, at different stages, various bought items are also fitted, welded and riveted. These activities are undertaken bit by bit and are an indispensable stage during the process of manufacture of wagons. The materials at the said stage are in a semi-finished/unfinished condition and in a crude and elementary form and these are then trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red type container is either built nor what is built in the process at the intermediate stage can be called marketable, attracting Excise duty. He clarifies that for building the wagons several other parts of wagons are received from outside/supplied free on behalf of Railways and these goods in any case pay duty before being received by the Appellants. 5. He draws our attention to the show cause notice where the cost of the Covered Type Container has been taken as Rs. 2,34,898/- which when compared with the value in the contract with the Railways appears to be the full value of the cost of steel and the fabrication cost for the entire wagon. He also shows from the show cause notice that the cost of under-frame has been taken as Rs. 3,08,865/- and subsequently revised as Rs. 3,68,865/- through a corrigendum which is even more than the cost of the wagon itself. He submits that apart from fact that the alleged parts are not marketable commodities, the valuation adopted is absurd as the same exceeds even the value of the wagons by more than three times. He states that the duty which has been confirmed is even more than the duty which would have been payable on the wagons if the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the tariff two conditions have to be cumulatively satisfied namely that the process by which an item is obtained is a process of manufacture and that the item so obtained is commercially marketable and bought and sold in the market or known to be so in the market. This legal position has been laid down by this Court in a number of judgments including Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad reported in 1995 (76) E.LT. 241, Union of India v. Delhi Cloth General Mills Co. Ltd. reported in 1997 (92) E.L.T. 315 and Cadila Laboratories Pvt. Ltd. v. CCE, Vadodara reported in 2003 (152) E.LT. 262. xxxxxxxx 8. In the case of Cadila Laboratories Pvt. Ltd. (supra) the Division Bench of this Court, speaking through one of us [Variava J.] has held: '9. Thus the law is that in order to be excisable, not only goods must be manufactured i.e. some new product brought into existence, but the goods must be marketable. By marketable it does not mean that the goods must be actually bought and sold in the market. But the goods must be capable of being bought or sold in the market. The law also is that goods which are in the crude or unsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to check this. The department has chosen not to do so. The burden being on the department it will have to be held that they have not discharged that burden. The order passed only on the basis that these goods can conceivably be sold cannot be sustained in the light of the law which has been set out hereinabove.'" 8. The ld. Sr. Advocate states that in view of the aforesaid decisions of the Hon'ble Supreme Court, it is necessary for Revenue to demonstrate and ad duce evidence that a particular product s marketable before Excise duty can be levied. In the instant case, the Revenue has not adduced any evidence whatsoever despite the fact that the adjudication was completed 13 years after the issue of show cause notice. Moreover, he cites the letter from the Nodal Ministry of Railways which categorically clarifies that the impugned goods which come into existence during wagon fabrication are not marketable In his submission, he states that the said opinion coming from another Ministry of the Govt. of India should not have been ignored while passing the impugned orders, particularly, in the absence of any evidence to the contrary from the Department to the effect that the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in market as identifiable goods. As regards the other item 'Covered Type Container', despite queries from Bench, the Department is not able to establish what this product is since we find from the submissions made by the Appellants that they build the wagons on the underframe itself and at no stage a separate Covered Type Container comes into existence. We also find that there is total non- application of mind on the part of the Adjudicating Commissioner in determining value of these two alleged parts much in excess of the total value of the wagon which is the end product of the manufacturing activities undertaken by the Appellants. Finally, the Railway Ministry which is the Nodal Ministry of the Govt. of India dealing with such goods as wagon and wagon parts has categorically stated that the impugned goods are not marketable an reason has been given in the impugned orders as to why the opinion of the said Ministry is not acceptable. 11. In view of above, we are unable to agree that the impugned goods are liable to Excise duty as identifiable or marketable parts of wagons. Hence, we set aside the impugned orders and allow the appeals. Since we have decided the appeals on the q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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