Marketability and manufacture tests upheld for assembled tea driers, confirming excisability and sustaining duty and penalty.

Fluid Bed Tea Driers were treated as excisable goods because the assembled units were found to come into existence before clearance from the factory and were capable of being moved, despite the plenum chamber. Applying the marketability test and the test of manufacture, the Tribunal held that standard models had already been assembled and tested, with no fresh material to show any different special model. It further held that the excisable value was correctly determined after excluding bought-out items and post-clearance charges, and that Tariff Item 68 covered the goods. The duty demand and penalty were therefore upheld.

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Issues: Whether Fluid Bed Tea Driers were excisable goods coming into existence before clearance from the factory and liable to duty under Tariff Item 68, and whether the demand and penalty were sustainable.

Analysis: The Tribunal held that the earlier remand had already proceeded on the footing that standard models of the machines came into existence before clearance, and no fresh material was produced to show that any different special model was involved. On the evidence, the machines were found to be assembled, tested, and capable of being moved from place to place; the plenum chamber did not necessarily make them immovable. The Tribunal applied the marketability principle and the test of manufacture, holding that the assembled units existed as goods in component form before dispatch. It further held that, after exclusion of bought-out items and post-clearance charges, the value of the excisable machine components was properly brought to duty, and that Tariff Item 68 covered such goods.

Conclusion: The Fluid Bed Tea Driers were held to be excisable goods falling under Tariff Item 68, and the duty demand and penalty were upheld against the assessee.

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