Polyurethane foam produced insitu on a ship was held excisable as manufactured goods with marketability satisfied.

Polyurethane foam produced insitu in a ship by the one-shot process was treated as manufactured or produced goods under Central Excise law because it resulted from a chemical and physical process using raw materials. The Court read the statutory scheme as covering goods both manufactured and produced, and held that marketability was satisfied since the foam had exchange value and no legal bar prevented sale. Its attachment to the ship did not exclude it from excisable goods. The product was therefore held liable to central excise duty.

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Issues: Whether polyurethane foam produced insitu in a ship by the one-shot process is manufactured or produced within the meaning of the Central Excise law and is therefore excisable and liable to duty.

Analysis: The product was held to result from a chemical and physical process using various raw materials, and the statutory scheme was read as covering goods both produced and manufactured. The Court also held that marketability was satisfied because the foam had exchange value and no legal prohibition prevented its sale. The fact that the product was fixed to the ship did not take it outside the description of excisable goods.

Conclusion: Polyurethane foam produced insitu by the one-shot process is excisable and liable to central excise duty, and the challenge fails.

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