TaxTMI 
TaxTMI 
1987 (5) TMI 33
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....to manufacture shoes, the petitioner company buys Cotton fabric in fully manufactured condition from the market. The manufacturers of cotton fabric have to pay excise duty as and when they manufacture cotton fabric. The case of the petitioners is that the cotton fabric is a marketable commodity and they buy this commodity from the market which has already borne excise duty. For the purpose of manufacturing footwear, cotton fabric is used by the petitioner in a special manner. Rubber solution is pasted on the one side of the fabric. Such rubber solution is prepared by mixing, inter alia, natural rubber with fillers accelerators and solvent oil. Two such sheets of pasted fabric are then pressed together so as to make the same thick enough for....
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....-12-1985 the Assistant Collector of Central Excise, Calcutta, 'G' Division wrote to the petitioners to the following effect: "The product in question cannot be considered as Unfinished/Semi-finished goods since after sandwitching the rubber compound in between two layers of cotton fabrics, the resultant goods become processed cotton fabrics which are actually used as raw material for manufacture of footwear, another distinct product under Item No. 36 of the C.E.T. Manufacturing of processed cotton fabrics under Item No. 19-I(b) is complete as soon as the two layers of cotton fabrics come out of the roller with rubber compound sandwitched in between. You are accordingly requested to furnish the particulars of such goods manufactured an....
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....bberised cotton fabrics in the absence of vulcanisation. It is only the process of vulcanisation which transforms the rubber from soft plastic state to a well bounded elastic state which is an absolute necessity for manufacture of the rubberised cotton fabrics. If the said semi-finished/ unfinished process material, which is not even vulcanised, is brought to the market, there will be a total loss of its tackiness and adhesive property which will render it useless". 6. The case of the respondents has been stated in the affidavit of Subhas Chandra Varshney, affirmed on llth April 1986. There it has been asserted in paragraph 10 that the petitioner No. 1 manufactures shoes and uses unvulcanised D.I. Cloth (rubber compound Sandwitched in be....
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....tions have been refuted in the affidavit-in-opposition. 10. The case of the petitioners is that no new marketable product has emerged as a result of making of the 'uppers'. It has been stated that the making of the 'uppers' does not require any process of manufacture. Thirdly, it has been asserted that the 'uppers' that are manufactured by the petitioners have to be used up immediately, otherwise the stickiness of the product will disappear and make the product unusable. Lastly, it was asserted that the whole thing from the beginning to end is one continuous process which ends in manufacture of shoes. In my judgment, all these questions should be gone into and decided by the respondents on examination of facts. If the goods manufactured ....
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....dised or painted. It was at that point only that the cans become a distinct and complete component capable of being used as a flashlight case for housing battery cells and having a bulb fitted to the case. The Supreme Court was faced with the question whether the aluminium cans produced by the appellant company could be described as 'goods' for the purpose of excise duty inasmuch as they were not marketable and were prepared entirely by the appellant for the flashlight manufactured by it. 13. The Supreme Court found that there were only two manufacturers of flashlight in India, the appellant being one of them. It was further found *that the aluminium cans prepared by the appellant were employed entirely by it in the manufacture of flashl....