TaxTMI 
TaxTMI 
1994 (12) TMI 75
X X X X Extracts X X X X
X X X X Extracts X X X X
....iduary tariff item No. 68 of the Schedule being excisable good within the meaning of Central Excises & Salt Act, 1944 ('Act' for short). 2. To answer the issue, few facts are necessary to be narrated. The appellant was engaged in the manufacture of welded steel pipes and tubes which were classified before 1.8.1983 under item 28AA of the First Schedule to the Act. Later on these items came to fall under tariff item 25 of the Schedule. The steel tubes and pipes produced by the appellant were exempt from duty as they were produced out of duty paid raw material. For the manufacture of these items the appellant had set up plant and machinery at its factory site. The first phase of installation was completed in the year 1974 by putting....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellant was informed in reference to its letter sent on 7th April, 1976 that the Government of India vide their notification No. 31/76 dated 28.3.76 having fully exempted the 'iron and steel products' listed at SI. No. 22 of the aforesaid notification from the operation of Rule 174 of the Central Excises Rules, 1944, the appellant was not required to take any licence. In 1983, however, the Inspector, Central Excise, sent a letter to the appellant regarding manufacture of steel pipes and tubes made out of steel strips exceeding 5 mm in thickness informing the appellant that the Superintendent, Central Excise, desires checking of the records to ascertain proof of payment of duty on raw materials received in the factory for manufacture ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng devices/Roll Sets & electricity supplied to your workers colony. This letter was replied on 5.4.84 giving the details of the project started by the appellant in 1981 and other details about balance sheet etc. On the same day, the plant and machinery installed in the appellant's factory consisting of the tube mill and the welding head were seized by the Preventive Officers. The seizure memo indicates that what was seized was 'Plants &, Machinery-Tube Mill & Welding Head manufactured and installed in premises of M/s. Quality Steel Tube (P) Ltd. during 2nd phase of expansion in 1981-82'. On 11th April, 1984, the Assistant Collector sent a letter, the relevant portions of which are extracted below: From perusal of Cha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ortable or transferable nor it could be sold, therefore, it could not be deemed to be excisable good within the meaning of the Act. The Collector, Central Excise, did not accept the explanation and it was held that the welding head was imported by the appellant from USA and likewise the tube mill manufactured by the appellant was transportable, transferable and saleable. Consequently, the two machineries under reference did not become a part of Immovable property. It was also held that to become good under the Act it was not necessary that it should be actually bought and sold. Since the unit erected and installed by the appellant was marketable or saleable, the appellant was liable to pay duty on it. The Tribunal also went in detail on the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it is implied that it applies to such goods as are moveable. The requirement of the goods being brought to the market for being brought and sold has become known as the test of marketability which has been reiterated by this Court in Collector of Central Excise v. Ambalal Sarabhai Enterprises, 1989 (43) E.L.T. 214. The Court has held in Union Carbide India Ltd. v. Union of India & Ors. - 1986 (24) E.L.T. 169 (SC) = (1986) 2 SCC 547 that even if a good was capable of being brought to market, it would satisfy the test of marketability. The basic test, therefore, of levying duty under the Act is two fold. One, that any article must be a good and second, that it should be marketable or capable of being brought to market. Goods which are att....