Marketability and extended limitation upheld for customer-specific manufactured goods; penalty sustained after Section 11AC came into force.

Goods made to customer specifications and produced through a manufacturing process were treated as excisable manufactured goods, and marketability was satisfied because the goods were actually sold. The adjudication was not vitiated by the absence of a fresh show cause notice after remand, as the earlier notice and remand proceedings were considered sufficient and no prejudice was shown. The extended limitation period was upheld on the basis of non-filing of declarations, failure to register as an SSI unit, and undisclosed removals. Penalty under Section 11AC was sustained because adjudication occurred after that provision came into force, and the appellant could not contest confiscation of goods lying in the buyer's premises for lack of locus standi.

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Issues: (i) whether the goods were excisable manufactured goods and marketable; (ii) whether absence of a fresh show cause notice before de novo adjudication vitiated the proceedings; (iii) whether the extended period of limitation was invocable; (iv) whether penalty could be imposed under Section 11AC of the Central Excise Act, 1944 for adjudication conducted after that provision came into force; and (v) whether the appellant could challenge confiscation of goods lying in the buyer's premises.

Issue (i): whether the goods were excisable manufactured goods and marketable.

Analysis: The goods were made to customer specifications under contract and came into existence only after a manufacturing process. Mere denial of manufacture was insufficient. Marketability was established because the goods were in fact sold to buyers; open market sale was not required.

Conclusion: The goods were excisable manufactured goods and were marketable, against the appellant.

Issue (ii): whether absence of a fresh show cause notice before de novo adjudication vitiated the proceedings.

Analysis: The proceedings were not vitiated merely because no fresh notice was issued after remand. The earlier notice and the remand proceedings adequately sustained adjudication, and no prejudice was shown.

Conclusion: No infirmity arose on this ground, against the appellant.

Issue (iii): whether the extended period of limitation was invocable.

Analysis: The appellant had not filed declarations, had not registered as an SSI unit, and had removed goods without disclosure. These facts supported suppression and justified invocation of the extended period.

Conclusion: The extended period of limitation was validly invoked, against the appellant.

Issue (iv): whether penalty could be imposed under Section 11AC of the Central Excise Act, 1944 for adjudication conducted after that provision came into force.

Analysis: Penalty was held sustainable because adjudication took place after Section 11AC had been introduced, and the order also sustained penalty under Rule 9(2) of the Central Excise Rules, 1944 for the relevant period.

Conclusion: Penalty under Section 11AC was permissible, against the appellant.

Issue (v): whether the appellant could challenge confiscation of goods lying in the buyer's premises.

Analysis: The appellant was not the owner of the goods lying in the buyer's premises and lacked locus standi to object to confiscation on that ground.

Conclusion: The challenge to confiscation failed, against the appellant.

Final Conclusion: The appeal failed in entirety and the Commissioner's order was sustained.

Ratio Decidendi: Goods made to customer specifications and actually sold are marketable excisable goods, and penalty under Section 11AC may be sustained where adjudication occurs after that provision has come into force even if the conduct predated it.

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