Manufacture and marketability in excise law: fabricated structurals may be manufactured goods, but duty needs a marketability finding.

Jurisdictional objections to the issuance of a show cause notice were treated as barred where the assessee received the notice, participated in adjudication, and did not object before the adjudicating authority, amounting to acquiescence. Fabricated trusses, purlins and similar structurals made from steel sheets, angles and channels through cutting, drilling and welding were regarded as commercially distinct articles and therefore as manufacture under excise law. Excisability could not be finally upheld, however, because no finding had been recorded on marketability. The matter was remanded for fresh consideration of excisability, limitation, cum-duty valuation and credit.

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Issues: (i) Whether the appellants could successfully challenge the jurisdiction of the Additional Collector to issue the show cause notice at the appellate stage; (ii) Whether the fabricated trusses, purlins and similar structurals amounted to manufacture and were exigible to duty.

Issue (i): Whether the appellants could successfully challenge the jurisdiction of the Additional Collector to issue the show cause notice at the appellate stage.

Analysis: The jurisdictional objection was held to be barred because it was not raised at the earliest opportunity. The appellants received the notice, participated in the adjudication, and did not object to the authority's jurisdiction before the adjudicating authority. Having submitted to the departmental process, they were treated as having acquiesced in that jurisdiction.

Conclusion: The jurisdictional objection was rejected and was not accepted in favour of the assessee.

Issue (ii): Whether the fabricated trusses, purlins and similar structurals amounted to manufacture and were exigible to duty.

Analysis: The structurals were found to have emerged from steel sheets, angles and channels through cutting, drilling and welding, and were commercially distinct from the raw materials. On that basis, the activity was held to amount to manufacture under Section 2(f) of the Central Excises and Salt Act, 1944. However, no finding had been recorded on marketability, which was essential to sustain excisability. The questions of limitation, cum-duty valuation and credit were also left for fresh consideration on remand.

Conclusion: Manufacture was affirmed, but excisability was not finally upheld because marketability had not been decided, and the matter was remanded for fresh adjudication.

Final Conclusion: The adjudication order was set aside and the dispute was sent back for fresh decision on excisability, limitation, valuation and credit after giving the parties an opportunity of hearing.

Ratio Decidendi: Fabricated structurals may amount to manufactured goods if they emerge as commercially distinct articles, but exigibility to excise duty cannot be upheld without a reasoned finding on marketability.

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