TaxTMI 
TaxTMI 
TaxTMI 
1999 (11) TMI 678
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....spective factory premises and the same is recoverable from them under Rule 9(2) of the said Rules; ORDERED Having regard to the discussion and findings above I pass the following order : (i) I confirm the demand of Central Excise duty Rs. 2,55,31,179.70 (Rs. Two crore fifty five lacs thirty one thousand one hundred seventy nine and paise seventy only) against M/s. Metro Tyres Ltd., B-27, Focal Point, Ludhiana, Rs. 2,80,60,571.23 (Rs. Two crore eighty lacs sixty thousand five hundred seventy one and paise twenty three only) against M/s. Ralson (India) Ltd., G.T. Road, Ludhiana, Rs. 51,57,604.29 (Rs. Fifty one lakhs fifty seven thousand six hundred four and paise twenty nine only) against M/s. Poddar Tyres Ltd., Jugiana, Ludhiana, Rs. 1,82,03,994.00 (Rs. One crore eighty-two lakhs three thousand nine hundred ninety four only) against M/s. Govind Rubber Ltd., Unit No. I, G.T. Road, Ludhiana and Rs. 86,13,774.10 (Rs. Eighty six lacs thirteen thousand seven hundred seventy four and paise ten only) against M/s. Govind Rubber Ltd., Unit No. IV, Focal Point, Ludhiana under Rule 9(2) of the Central Excise Rules, 44 and direct them to pay th....
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....n 3 of the Central Excises & Salt Act, 1944. Show Cause Notices were, therefore, issued and investigations were conducted. In reply to the SCN, the appellants submitted that at no stage in the process of preparation of tyre, cotton cord/fabrics comes into existence: that it was a pre-requisite that there must be a fabric which may become a rubberised textile fabric after being subjected to the process of rubberisation; that tyre cord does not have any weft and, therefore, it cannot be described as fabrics; that no evidence has been produced that tyre cord is a fabric. It was argued that product in this case has no shelf life, is not marketable and that the burden was on the Department to prove that the goods are marketable. It was contended that since there was no proof of marketability the product cannot be treated as goods for charging duty under Section 3 of the Central Excise Act. It was contended that for charging duty under Chapter 59 only these fabrics would be qualified in which the textile materials pre-dominate over other materials; that in their case the rubber element is 64% as against 36% of cotton contents. In support of this contention they cited the judgment of the....
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....t in the case of Cosmos India Rubber Works v. U.O.I. reported in Writ Petition No. 401 of 1963 stating that the Hon'ble High Court expressed similar view on marketability etc. Ld. Counsel also referred to the judgment of the Hon'ble Delhi High Court in the case of Bata India Ltd. v. U.O.I. reported in Writ Petition No. 606 of 1970 and submitted that the Hon'ble High Court held that intermediate goods which are not bought and sold in the market are not goods for purpose of Section 3 of the Central Excise Act. Ld. Counsel referred to the judgment of this Tribunal in the case of Bharat Electronics v. C.C.E. reported in 1993 (67) E.L.T. 140 and submitted that intermediate product are not liable to duty if they are not marketable. He cited some other case law in support of his contentions. Ld. Counsel cited and relied upon the decision of the Apex Court in the case of U.O.I. & Others v. DCM reported in 1977 (1) E.L.T. (J 199). In this case the Apex Court held that excise duty is on the manufacture of goods and not on their sale. Therefore, the fact that a substance is produced at an intermediate stage and is not to be in the market would not make any difference. The Apex Court further h....
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....9 of Central Excise Rules, 1944. Ld. Counsel submitted that these two decisions clearly bring out that the product that comes into existence as an intermediate product if it is not marketable and therefore, not chargeable to duty. Summing up the argument Ld. Counsel submitted that since the product has a short shelf life, cannot be allowed to remain idle for longer duration as curing, sets in the process and the fact that it is not marketable, it is not goods and leviable to duty. He, therefore, prayed that the appeals filed by the different parties may be allowed. 6. Shri K. Srivastava, Ld. DR appeared for the Revenue reads obviously from the impugned order. He submits that shelf life supported by expert opinion and affidavits has been dealt with by the Ld. Commissioner. He submits that marketability is one of the aspect, which has been dealt with in the order appealed. He submits that the product is a specified product in the Tariff and the process undertaken by the appellants is a process of manufacture; that all these aspects have been gone into in detail in the impugned order. He reiterates the findings of the Ld. Commissioner and submits that the order is very detailed ....