Aggregate production, non-sale and later fixing to earth did not remove RCC poles from excise liability under the exemption notification.

Production from multiple licensed units was treated as aggregate production for applying Notification No. 105/80-C.E., so the exemption limit was tested on the combined output rather than each unit separately. The text states that non-sale does not by itself remove excisability, because goods may remain excisable even if not sold. It also states that later embedding of RCC poles in the earth does not change their character as manufactured goods for excise purposes. A further plea that the poles were used within the factory was rejected because they were not manufactured for in-factory use.

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Issues: Whether the production of RCC poles from multiple licensed units was to be aggregated for applying the exemption notification, and whether the poles were outside the levy because they were not sold, were fixed to the earth, or were used within the factory.

Analysis: The production from all the units was treated as one for the purpose of applying Notification No. 105/80-C.E., and the total production was found to cross the prescribed limit. The absence of sale did not affect excisability, since goods do not cease to be excisable merely because they are not sold. The fact that the poles were later embedded in the earth also did not take them out of excise, because they were manufactured goods before being transported and fixed at site. The plea that they were used in the factory was rejected on the footing that the poles were not manufactured for use in the factory itself.

Conclusion: The exemption was held inapplicable and the RCC poles were treated as excisable; the appeal failed.

Final Conclusion: The levy was sustained on the basis that the notification limit had to be tested on the aggregate production of the relevant units and that neither non-sale nor subsequent fixation to the earth removed the goods from excise liability.

Ratio Decidendi: For applying an exemption notification to goods manufactured in different units of the same undertaking, the relevant production may be aggregated where the notification so operates, and goods do not cease to be excisable merely because they are not sold or are later affixed to the earth.

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