Excise duty on intermediate manufacture of hinges was held not leviable under the applicable classification and circular.

Hinges manufactured from hot rolled cut strips were treated as not attracting excise duty at the intermediary stage, because Circular No. F. 139/3/80-CX, dated May 1980, clarified that duty was not leviable on that intermediate process. The classification dispute under item 26AA(iii) was resolved consistently with the circular, which the Court treated as governing the duty position for the manufacture process. The operative effect was that the intermediary stage was held outside excise levy, and the rule was made absolute.

---

---

Issues: Whether hinges manufactured from hot rolled cut strips were liable to duty on the intermediary process in view of the relevant excise circular and classification under item 26AA(iii).

Analysis: The Circular bearing No. F. 139/3/80-CX, 4 dated May 1980 clarified that, for hinges manufactured from hot rolled cut strips, duty was not leviable at the intermediary stage. The Court treated this clarification as resolving the classification and duty liability issue against levy on the intermediate process.

Conclusion: The intermediary process was not liable to excise duty, and the rule was made absolute.

---