Cold rolled strips classification turned on marketability and captive use, with intermediate hinge material held outside excise duty.

Intermediate material obtained from processing hot rolled cut strips for hinge manufacture was held not to be cold rolled strips under Tariff Item 26AA(iii), because the process amounted to smoothing and evening the material rather than producing a commercially saleable strip. The product was not marketed as cold rolled strips and was consumed captively within the factory for hinge production. On that basis, it was not treated as a distinct excisable product liable to further duty as cold rolled strips, and the issue was resolved in favour of the assessee.

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Issues: Whether the intermediate product obtained by processing hot rolled cut strips for use in the manufacture of hinges was classifiable as cold rolled strips and liable to further duty under Tariff Item 26AA(iii); and whether the product was marketable as such.

Analysis: The product emerging from the process was not a strip in the ordinary sense, but an irregular intermediate material used captively in hinge manufacture. The reasoning distinguished cold rolling from mere cold working, noting that the process was directed to smoothing and evening the material rather than producing a commercially saleable strip of the kind contemplated by the tariff entry. The material was not brought into the market as cold rolled strips and was consumed within the factory for manufacture of hinges. On that basis, it was not treated as a distinct excisable product answerable to further duty as cold rolled strips.

Conclusion: The intermediate product was not liable to further duty as cold rolled strips under Tariff Item 26AA(iii), and the issue was decided in favour of the assessee.

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