Predominant-use test governs tariff entries, and intra-factory excise liability requires proper factual inquiry.

Where a tariff entry makes liability depend on use, the word "used" refers to the common, ordinary, main or predominant use of the product, not a merely possible, stray or occasional use in dyeing. On intra-factory consumption, excise liability under the Central Excise Rules depended on the correct legal setting under Rules 9 and 49 and the self-removal framework; the matter required proper factual inquiry before taxability could be determined. The analysis therefore treats use-based classification as a predominant-use enquiry and links intra-factory duty questions to the applicable excise procedure and factual examination.

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Issues: (i) Whether the expression "used" in Item 14D of the First Schedule to the Central Excises and Salt Act, 1944 means merely capable of being used in a dyeing process or means commonly or predominantly used in such process; (ii) Whether excise duty was payable where the product manufactured in the assessee's factory was consumed within the factory in the manufacture of other products.

Issue (i): Whether the expression "used" in Item 14D of the First Schedule to the Central Excises and Salt Act, 1944 means merely capable of being used in a dyeing process or means commonly or predominantly used in such process.

Analysis: The expression was construed in the setting of the tariff item and in light of the ordinary and common use of the product. The reasoning adopted the principle that where a taxing entry links liability to a particular use, the relevant enquiry is not whether the product is merely capable of such use, but whether that use is its common, ordinary, main, or predominant use. Rare, stray, or occasional use in a dyeing process was held insufficient to attract the levy.

Conclusion: The expression "used" in Item 14D denotes commonly or predominantly used, and not merely capable of being used or occasionally used.

Issue (ii): Whether excise duty was payable where the product manufactured in the assessee's factory was consumed within the factory in the manufacture of other products.

Analysis: The revisional view that duty necessarily arose on intra-factory removal was held to be incorrect on the reading of Rule 9 and Rule 49 of the Central Excise Rules. The matter was also linked to the scope of Chapter VII-A regarding self-removal procedure. Since the authorities below had not examined the liability in the correct legal setting and the factual basis required proper inquiry, the matter was considered fit for reconsideration by the appellate authority.

Conclusion: The intra-factory consumption issue required fresh consideration and was remitted for decision in accordance with law.

Final Conclusion: The challenge succeeded only in part, the levy was not finally upheld, and the matter was sent back for reconsideration on the relevant factual and legal questions.

Ratio Decidendi: Where a tariff entry makes liability depend on a particular use, the expression "used" refers to the common, ordinary, or predominant use of the product, and questions of taxability that turn on such use must be decided on proper factual inquiry.

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