Immovable factory sheds are not excisable goods; marketability is essential, and duty notices based on such erection fail.

Construction of factory sheds from plates, channels, angles and similar materials was treated as erection of immovable structures embedded in the earth, not as manufacture of excisable goods. The controlling test was marketability: an article must be goods capable of being brought to market, and that requirement was not met. On that basis, central excise duty could not be levied. Notices demanding duty and proposing penalty were therefore unsustainable, because they were founded on non-excisable activity and were without authority of law and jurisdiction; the quashing of those notices was upheld.

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Issues: (i) Whether construction of factory sheds from plates, channels, angles and similar materials amounted to manufacture of excisable goods under the Central Excise law. (ii) Whether the show cause notices issued for recovery of duty and penalty were liable to be quashed for want of authority of law and jurisdiction.

Issue (i): Whether construction of factory sheds from plates, channels, angles and similar materials amounted to manufacture of excisable goods under the Central Excise law.

Analysis: The activity consisted of erecting sheds embedded in the earth for use within the factory. The materials or structures were not brought into the market for sale and did not satisfy the essential requirements of goods exigible to central excise. The controlling test applied was that an article must be goods and must also be marketable or capable of being brought to market. Construction resulting in immovable structures did not fulfil that test, and the definition of manufacture could not be stretched to cover such erection activity.

Conclusion: The activity did not amount to manufacture of excisable goods, and duty could not be levied on that basis.

Issue (ii): Whether the show cause notices issued for recovery of duty and penalty were liable to be quashed for want of authority of law and jurisdiction.

Analysis: Since the underlying activity was not exigible to central excise, the notices demanding duty and proposing penalty were unsustainable. The Court accepted that a show cause notice can be interfered with when it is wholly without authority of law or jurisdiction, and the notices in question fell within that category.

Conclusion: The show cause notices were invalid and rightly quashed.

Final Conclusion: The challenge to the quashing order failed, and the connected appeals were dismissed with the order of the Single Judge left undisturbed.

Ratio Decidendi: For central excise, an item must be goods having marketability; immovable structures embedded in the earth and erected for use within a factory are not excisable goods, and notices founded on such non-excisable activity are without jurisdiction.

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