Mandatory inspection determines excise manufacture stage for gas cylinder valves, making pre-inspection R.G. 1 entry unnecessary.

Where a regulatory scheme makes inspection and certification mandatory for marketability, chlorine gas cylinder valves are treated as fully manufactured for excise purposes only after that compulsory process is completed. Applying the Gas Cylinders Rules, 1981 and the prescribed inspection schedule, the valves did not reach the stage requiring entry in the R.G. 1 register before ISI or approved-authority inspection. On that basis, the seizure and confiscation of the valves were not sustainable.

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Issues: Whether chlorine gas cylinder valves became fully manufactured and marketable only after mandatory inspection and certification under the Gas Cylinders Rules, 1981, so that they were required to be entered in the R.G. 1 register only after such inspection.

Analysis: The dispute concerned 422 pieces of chlorine gas cylinder valves seized on the footing that they had been fully manufactured but were not entered in the R.G. 1 register. The relevant provisions of the Gas Cylinders Rules, 1981, particularly Rules 3, 4, 7 and 15, and the Schedule prescribing inspection and certification by the ISI or the approved authority, showed that inspection was compulsory for such valves. On that footing, marketability of the goods depended on completion of the mandatory inspection process, and the stage of manufacture for excise purposes was not complete before that regulatory requirement was satisfied.

Conclusion: The valves were not required to be entered in the R.G. 1 register before ISI inspection, and the seizure and confiscation were not sustainable.

Ratio Decidendi: Where a statute makes inspection and certification mandatory for marketability, the goods attain the stage of full manufacture for excise purposes only after completion of that compulsory inspection.

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