Excise liability on received poly bags fails where no manufacture by user is shown and classification becomes unnecessary.

Rejected poly bags received from another manufacturer and used only for filling detergent powder were not excisable goods in the appellant's hands because excise liability arises on manufacture, not on mere use of goods in the production process. On the admitted facts that the bags were not manufactured by the appellant and were damaged during filling, no central excise duty could be levied. Once that position was accepted, the tariff classification dispute did not survive for decision and was unnecessary to determine.

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Issues: Whether rejected poly bags received from another manufacturer and used only for filling detergent powder could be subjected to central excise and whether the classification dispute required determination.

Analysis: The bags in question were not manufactured by the appellant but were received for use in the manufacturing process and became damaged during filling. On that admitted factual position, the goods could not be treated as excisable goods manufactured by the appellant. The liability to excise arises on manufacture, not on mere use of goods, and once that basic position was accepted, the controversy regarding tariff classification did not survive for decision.

Conclusion: The goods were not liable to central excise in the appellant's hands and the classification issue was unnecessary to decide.

Final Conclusion: The impugned orders were set aside and the appeal succeeded on the ground that no excise duty could be levied on the mere use of the received poly bags.

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