Excise duty requires a marketable manufactured product; cold rolled strips failed that test, and duty on mill ends was refundable.

Cold rolled strips obtained from hot rolled strips were not exigible to excise duty because the process did not establish emergence of a commercially distinct and marketable product; Indian Standard specifications alone were insufficient to prove marketability, so the levy was unsustainable. Excise duty paid on reversible mill ends was refundable because they had already been treated as scrap for tariff purposes and were not cold rolled strips, supporting the assessee's refund claim. The impugned revenue demand was quashed and relief was granted against the levy, with refund allowed for the mill ends.

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Issues: (i) Whether cold rolled strips obtained from hot rolled strips were exigible to excise duty as manufactured goods under Tariff Item 26AA(III); (ii) whether excise duty paid on reversible mill ends was refundable.

Issue (i): Whether cold rolled strips obtained from hot rolled strips were exigible to excise duty as manufactured goods under Tariff Item 26AA(III).

Analysis: The decisive question was whether the processing of hot rolled strips into cold rolled strips resulted in manufacture of a commercially distinct and marketable product. The record showed no proof that cold rolled strips were marketable in the form contended for by the Revenue. Mere reference to specifications in the Indian Standard Specification did not establish marketability. In the absence of proof of marketability and of a new commodity emerging from the process, the levy could not be sustained.

Conclusion: The demand of excise duty on cold rolled strips was not sustainable and was set aside.

Issue (ii): Whether excise duty paid on reversible mill ends was refundable.

Analysis: The revisional authority and the Single Judge had already accepted that reversible mill ends were not cold rolled strips and had directed that they be treated as scrap for tariff purposes. That determination supported the assessee's claim for refund of duty paid on those mill ends.

Conclusion: The excise duty paid on reversible mill ends was refundable.

Final Conclusion: The impugned decisions were reversed, the revenue demand was quashed, and the assessee obtained relief against the levy together with refund in respect of reversible mill ends.

Ratio Decidendi: Excise duty is not leviable unless the process results in a commercially marketable product amounting to manufacture; marketability cannot be presumed merely from industrial specifications.

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