TaxTMI 
TaxTMI 
1981 (9) TMI 106
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....he benefit of the exemption from duty of excise conferred by a Notification No. 4/68-C.E., dated January 20, 1968. 2. The appellant-Company which has its factories at Sion East and Andheri East in Bombay is engaged in the manufacture of various process chemicals required for the Textile Industry. Amongst the process chemicals so manufactured by them are substances known as emulsifiers and wetting out agents. These products fall within the scope of Tariff Item 15AA of the First Schedule to the Act, which reads: "Organic Surface Active Agents (other than soap); Surface Active preparations and washing preparations, whether or not containing soap." For use as raw-material for the manufacture of the emulsifiers/wetting out agents, the a....
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....ce active agents used in the manufacture of such emulsifiers, wetting out agents, softeners and other like preparations the appropriate amount of the duty of excise or the additional duty under Section 2A of the Indian Tariff Act, 1934 (32 of 1934), has already been paid or where such surface active agents are purchased from the open market on or after the 20th day of January 1968." 4. It is common ground that the organic surface active agents used by the appellant as raw-material for the manufacture of emulsifiers/wetting out agents were purchased by it subsequent to the 20th day of January, 1968. The Central Excise authorities originally treated the manufactured product, namely the emulsifiers etc. as exempt from levy of duty by virtue....
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....scribed in the Notification were not fulfilled. The said order was confirmed by the Appellate Collector of Central Excise, Bombay, before whom the matter was carried in appeal by the present appellant. While upholding the view taken by the Assistant Collector that the benefit of the exemption granted by the Notification would be available only in cases where the raw-material, namely, the surface active agents had been subjected to duty at the primary stage, the Appellate Collector went further and held that the purchase of the aforesaid raw-material effected by the appellant from M/s. Industrial General Products Private Limited could not be regarded as `purchased from the open market' and that for this additional reason also, the appellant ....
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....manufacturer who was exempt from payment of excise duty on account of the fact that the process of manufacture was being carried out without the aid of power. The appellant-Company contends that the second of the aforesaid conditions, namely, that the surface active agents should have been purchased from the open market on or after the 20th day of January, 1968 was fully satisfied in the present case, and hence it was entitled to the benefit of the exemption granted by the Notification. That the appellant had purchased the surface active agents used in the manufacture of the emulsifiers/wetting out agents subsequent to the 20th day of January, 1968 is undisputed. The purchases of the raw-material had been made by the appellant from the Indu....
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.... namely, cases where the surface active agents were purchased from the open market on or after the 20th day of January, 1968. 10. That brings us back to the question whether the purchases effected by the appellant from M/s. Industrial General Products Private Limited were purchases "from the open market" ? Having due regard to the context in which the expression "open market" has been used in the Notification, it would be wholly wrong to understand the said expression "open market" as connoting only a market-yard, bazar or a shopping complex where goods are offered for sale. Industrial chemicals (which have to be ordinarily purchased in bulk for use as raw-material in the manufacture of secondary products) are not commodities that are us....