Marketability test under excise law: captive-use Elvamide solution with short shelf life was not excisable goods.

Excise duty attaches only when manufacture results in a distinct, marketable commodity capable of being bought and sold. A solution made by mixing Elvamide granules with solvent and water, used captively in the assessee's own process and having a limited shelf life, was not shown to be marketable. On those facts, mere conversion of the granules into a ready-to-use solution did not amount to manufacture of excisable goods, and central excise duty was not leviable.

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Issues: Whether the Elvamide solution prepared by mixing Elvamide granules with solvent and water, having limited shelf life and used captively, was excisable and marketable so as to attract central excise duty.

Analysis: Duty of excise is attracted only on manufacture of goods, and the article must be a distinct commodity known in the market or capable of being sold. Mere change in form or captive consumption does not by itself amount to manufacture. On the facts, the Elvamide granules were converted into a solution for immediate use in the assessee's own process, the solution had a short shelf life, and there was no material to show that it was marketable as such. The admitted nature of the process and the absence of marketability negatived the Department's attempt to treat it as excisable goods.

Conclusion: The Elvamide solution was not excisable and no excise duty could be levied on it.

Ratio Decidendi: An article is exigible to excise only if manufacture results in goods that are distinct, marketable, and capable of being bought and sold; captive consumption of a non-marketable product with a limited shelf life does not satisfy that test.

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