Phenol-formaldehyde resin classified as excisable goods where marketability and tariff coverage were established despite captive use.

A phenol-formaldehyde product was treated as resin because the manufacturing process had reached the A-stage of condensation and the product had adhesive properties arising from completed reaction. It was held to fall within Tariff Item 15A(1) as an artificial resin, and the presence of some water did not remove it from that entry. The product was also regarded as goods for Central Excise purposes because it had shelf life, could be stored and shipped, and was capable of being marketed; captive use did not negate excisability. The appeal was rejected and the duty demand sustained.

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Issues: (i) Whether the product manufactured by the appellants was resin; (ii) whether the product fell within Tariff Item 15A(1); and (iii) whether the product was goods for the purpose of Central Excise levy.

Issue (i): Whether the product manufactured by the appellants was resin.

Analysis: The manufacturing process showed a phenol-formaldehyde condensation reaction progressing to the A-stage of the resin. The product was not a mere solution of resin but a condensation product having adhesive properties arising from the reaction already completed. The technical literature and the test material supported the conclusion that the product was phenolic resin in an advanced stage of development.

Conclusion: The product was resin.

Issue (ii): Whether the product fell within Tariff Item 15A(1).

Analysis: Tariff Item 15A(1) covered condensation, polycondensation and polyaddition products, including phenoplasts and other artificial resins. The product had already reached the stage of resin recognised in the technical literature and was not comparable to a resin solution that remains outside the entry. The presence of some water did not take it of the tariff description.

Conclusion: The product fell within Tariff Item 15A(1).

Issue (iii): Whether the product was goods for the purpose of Central Excise levy.

Analysis: The product had a shelf life, could be stored, and the literature showed it was capable of being shipped and brought to the market. Actual sale was not necessary where capability of marketability was established. Captive use by the appellants did not negative excisability once the product was marketable and capable of being bought and sold.

Conclusion: The product was goods for the purpose of Central Excise levy.

Final Conclusion: The appeal was rejected and the duty demand was sustained because the product was correctly treated as marketable resin classifiable under the tariff entry.

Ratio Decidendi: A phenol-formaldehyde product that has reached the resin stage and is capable of being stored, marketed, and brought to sale is excisable even if captively consumed and even if some water remains in the mass.

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