Manufacturing waste and marketability test determine excise duty liability for ceramic wool edge trimmings and shots.

Edge trimmings and shots generated as waste in the manufacture of ceramic wool were not excisable goods because they did not emerge as goods from a process of manufacture and were not shown to satisfy the test of marketability. Duty could not be levied merely because the waste was capable of being sold or recovered as scrap. On that basis, the department's demand was unsustainable and the items were held not chargeable to excise duty.

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Issues: Whether edge trimmings and shots arising during the manufacture of ceramic wool and articles thereof were excisable goods chargeable to duty.

Analysis: The items in question arose only as waste during the course of manufacture and were not shown to have emerged as goods from a process of manufacture. In the absence of material establishing that they satisfied the test of marketability and the statutory requirement of manufacture, duty could not be levied merely because the waste was capable of being sold or recovered as scrap. The earlier view that such waste was not excisable goods was consistent with the binding principles governing levy of excise duty.

Conclusion: The edge trimmings and shots were not excisable goods and were not chargeable to duty; the department's demand was unsustainable.

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