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TMI Blog1971 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with other components for making flashlight cases. The "aluminium cans or torch bodies", which the petitioner produces in the course of the manufacture of torches, have been subjected to excise duty under the Central Excise and Salt Act, 1944. In order to appreciate the contentions of the petitioner, it is necessary to refer to some of the provisions of the Act. Section 3 is the charging section and sub-sections (1) and (1-A), which are relevant for the purpose of this case, read thus :- There shall be levied and collected in such manner as they(1). may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India, and duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule. (1-A) The provisions of Sub-section (1) shall apply in respect of all 'excisable goods other than salt which are produced or manufactured in India by or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government." "Excisable goods" have been defined in clause (d) of section 2 to mean goods specified in the First Schedule as bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petition it is clear that the "aluminium cans or torch bodies" prepared by the petitioner are extruded shapes of aluminium. 3.The contention of Shri Gupta, learned Counsel for the petitioner, is that Item No. 27(e) covers only those articles which can be called "goods" according to the generally accepted meaning of that word. According to learned counsel, the word "goods'' means finished product which are known in the market and are marketable. He, therefore, urges that Item No. 27(e) is applicable only to such extruded shapes and sections of aluminium as are finished products, are knowing the market and are marketable. According to him, since the "aluminium cans or torch bodies" produced by the petitioner as intermediate products are not finished products and are neither known in the market nor they are marketable, they do not fall within Item 27(e). The second contention is that Item 27 is confined to manufactured goods and that, since in the production of the "aluminium cans or torch bodies" no manufacturing process is involved, the product is not excisable to excise duty. His third and last contention is that the excise duty on Item 27(e) being payable ad valorem no duty c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil", as contemplated by item 12 of the First Scheduled, and was, therefore, liable to duty. The first contention was rejected by the Supreme Court on the ground that the processed oil was not "refined oil" as known in the market. With regard to the second argued, the Supreme Court held that the duty was, on the "manufacture of goods" i.e. on the bringing into existence a new substance known to the market and the new substance has to be something which can come to the market to be brought and sold. It, therefore, rejected this argument on the ground that the processed oil was not something which was known to the market and was not "goods" which could come to the market to be bought and sold. The Supreme Court was further of the view that, since the duty was on manufacture of "goods" and not on sale, it was not necessary that the good manufactured should actually be sold. Shri Gupta has placed reliance upon this part of the decision of the Supreme Court where it has been held that only an article, which answer the description of "goods" i.e. something which is known to the market and can be brought and sold, can be held to be liable to excise duty. 6.The second case relied upon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases shows :- That excise duty is levied on the manufacture of goods;(i) That manufactured goods, which are set out in the First(ii) Schedule to the Act, are leviable with excise duty; (iii)That the commodity mentioned in any of the items of the First Schedule is exigible to excise duty only if it has come into existing as a result of some manufacturing process; That the commodity manufactured must answer the description(iv) of goods, namely, that it should be known to the market and must be an article which can ordinarily come to the market to be bought and sold; That it is not necessary that the goods manufactured by an(v) assessee should be actually sold. 8.The third case relied upon by Shri Gupta is an unreported decision of the Supreme Court in Union of India v. Hindu Undivided Family Business known as Ram Lal Mansukharai [1978 (2) E.L.T. (J 389) (S.C.) = Civil Appeal No. 887 of 1968 decided on August 21, 1970]. In this case the assessee was a manufacturer of brass and kansi utensils. It procured copper, tin and zinc and kansi as an alloy of copper and tin. These alloys were then converted into billets. These billets were then got rolled in rolling mills into uncu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the First Schedule to the Act; it has come into existence as a result of some manufacturing process; and it answers the description of "goods", that is to say, it is something which can readily come to the market to be bought and sold. It has, therefore, to be seen whether the "aluminium cans or torch bodies" produced by the petitioner fulfil these three requirements. From the assertions made in paragraph 3 of the writ petition that the petitioner extruded aluminium cans at its factory from aluminium slugs by the process mentioned in paragraph 4 of the petition there can be no doubt that the product of the petitioner is "extruded shape" of aluminium and is covered by item 27(e). The assertion of the petitioner that it and the other flashlight manufacturers do not sell this product but subject it to further process to convert it into torches is irrelevant in view of the Supreme Court decisions. It also cannot be seriously disputed that the process, by which the "aluminium cans to torch bodies" are produced amounts to manufacture. The very fact that in clause (a) of Item 27 crude forms of aluminium including aluminium slugs, are mentioned and subjected to excise duty and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffidavit that the petitioner company sold extruded products to M/s. Bush Radio Company and, in support of this assertion, Annexure III to the counter affidavit has been filed which is a letter of the petitioner company to the Deputy Superintendent of Central Excise dated April 14, 1967. The petitioner company, in its rejoinder affidavit, has not denied the supply of extruded shapes to Messrs Bush Radio Company but has asserted that those extruded shapes are different from the "aluminium cans or torch bodies" manufactured by it for its flashlights. It is asserted in the rejoinder-affidavit that the extruded shapes, which were supplied to Messrs Bush Radio Company, were finished products known as "Bush Components" which were marketable and were, in fact sold by the company. It is further asserted that "Bush Components" were totally different from the "aluminium cans or torch bodies" manufactured by the petitioner, the diagrams relating to "Bush Components" have been annexed as Annexure 2 to the rejoinder-affidavit. It was further asserted by the respondents in paragraph 1(d) of the counter-affidavit that the petitioner company extruded another variety of product called "Phillips Varc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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