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Issues: (i) Whether the asbestos rings and asbestos fabrics emerging at an intermediate stage were fully manufactured goods and marketable so as to fall under Item 22-F(4) of the Central Excise Tariff. (ii) Whether the levy at the identified stage amounted to charging duty at every stage of manufacture in the light of Rules 9 and 49 of the Central Excise Rules, 1944.
Issue (i): Whether the asbestos rings and asbestos fabrics emerging at an intermediate stage were fully manufactured goods and marketable so as to fall under Item 22-F(4) of the Central Excise Tariff.
Analysis: The products were examined as they emerged after the fourth stage of manufacture. They were found to be finished and identifiable asbestos products, not crude or elementary forms, and required no further processing to become asbestos manufactures. Their use in the assessee's factory for making brake linings and clutch facings did not alter their identity as separate asbestos products. The fact that they were sold, if at all, only to a limited class of industrial users did not detract from their marketability or character as goods.
Conclusion: The products were goods, were marketable, and were liable to duty under Item 22-F(4); this issue was decided against the assessee.
Issue (ii): Whether the levy at the identified stage amounted to charging duty at every stage of manufacture in the light of Rules 9 and 49 of the Central Excise Rules, 1944.
Analysis: The department was not seeking to levy duty at every stage of manufacture. Duty was sought only when finished asbestos products emerged under Item 22-F(4) and again at the final stage when identifiable motor vehicle parts emerged under Item 34A. The process history showed that the challenged levy was confined to specific completed products and not to each intermediate operation.
Conclusion: The contention based on Rules 9 and 49 failed and this issue was decided against the assessee.
Final Conclusion: The asbestos rings and asbestos fabrics were held to be finished, identifiable and marketable asbestos products exigible to central excise duty, and the appeal was dismissed.
Ratio Decidendi: An intermediate article is excisable when it is a finished and identifiable product answering the tariff description and possessing marketability, even if it is captively consumed for further manufacture and sold only to a limited industrial class.
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