Commercially distinct intermediate goods test defeated separate excise treatment for aluminium circles in a continuous manufacturing process.

A continuous manufacturing process converting aluminium sheets into aluminium measures did not bring into existence commercially distinct intermediate circles, because the circles were not removed as a separate stage and were not marketed as such. Since the sheets had already suffered duty under Tariff Item 27(b), the intermediate product was not treated as liable to separate excise treatment. On that basis, the revisional authority accepted the assessee's contention and dropped the revisional proceedings under section 36(2) of the Central Excises and Salt Act, 1944.

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Issues: Whether the impugned intermediate products were manufactured circles falling within Tariff Item 27(b), and whether the revisional proceedings under section 36(2) of the Central Excises and Salt Act, 1944 should continue.

Analysis: The assessee's process of making aluminium measures from aluminium sheets was treated as a continuous process in which the so-called circles were not removed at an intermediate stage and were not marketed as circles. It was also noted that the sheets had already suffered duty under Tariff Item 27(b), and these features supported the view that the assessee had not brought into existence commercially distinct circles liable to separate treatment.

Conclusion: The revisional authority accepted the assessee's contention and dropped the review proceedings.

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