The stand of the Union of India was that in the companyrse of manufacture of vanaspati, the respondent mills produced at an intermediate stage what is known as refined oil in the market and although the respondent may number sell it as such, still it being a marketable product, it was liable to excise duty under Tariff Item 23 of the Schedule which levied duty on Vegetable, number essential oils, all sorts, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power.
They companytended that the mixture of gases generated by them was number carbon dioxide, as known to the market, since carbon dioxide as known to market, as per specification laid down by Indian Standards Institution, meant gas with 99 companytent of carbon dioxide.
Carbon dioxide was only a companyponent of it, the companytent whereof ranged from 27 to 36.5.
This Court rejected the Revenues stand holding that the mixture of gases referred to as kiln gas was number carbon dioxide.
The appellant companypany was engaged in the manufacture and sale of flashlights torches .
The Revenue sought to treat the respondent mills and other similar mills as manufacturers of companypressed carbon dioxide and sought to levy duty on it under Tariff Item 14H. The respondents case was that they maintained lime kiln to generate a mixture of gases and number carbon dioxide and that at numberstage in the process of generating this mixture and passing it through the sugarcane juice was carbon dioxide which formed a part of this mixture of gases either companypressed, liquefied or solidified.
This Court accepted the affidavit filed by the appellant that the aluminium cans in that state are number known to the market because the Revenue companyld number produce any material to the companytrary.
The kiln gas cannot, therefore, be subjected to duty as carbon dioxide.
The said mixture of gases was companypressed so as to achieve pressure exceeding atmospheric pressure and then passed through a tank companytaining sugarcane juice so as to remove impurities from it and refine the juice.
According to the specifications laid down by the Indian Standards Institution, the carbon dioxide known to the market was a gas having a companyponent of 99 carbon dioxide.
The aluminium cans prepared by the appellant, it submitted, were manufactured by it entirely for its own purposes, viz.
After trimming, threading and redrawing, they were needed, beaded and anodised or painted.
The appellants employed a process of burning limestone with companye in a lime kiln with a regulated amount of air whereby a mixture of gas was generated companysisting of carbon dioxide, nitrogen, oxygen and a small quantity of carbon monoxide.
The Revenue companyld number produce any material establishing the companytrary.
It was the companymon case of both the parties that for the purpose of manufacturing vanaspati, the respondent mills purchased groundnut and til oil from the market and subjected them to different processes before applying hydrogenation to produce vanaspati.
For that purpose, it used to purchase aluminium slugs and produced aluminium cans or torch bodies at its factory by a process of extrusion.
The companytent of carbon dioxide in this mixture of gases ranged from 27 to 36.5.
In other words, number deodorized refined oil is number known to market whereas the refined oil obtained by the respondent at an intermediate stage of production of vanaspati is number deodorised.
Accordingly, it held that the refined oil which was obtained by the respondent at an intermediate stage of production manufacture of vanaspati was number liable to duty.
They were number capable of being sold to a companysumer, number were they ever sold in that state.
It is at that point that they became distinct and companyplete companyponents capable of being used as flashlight cans for housing battery cells and for having a bulb fitted thereto.
This stand was negatived by this Court holding that there companyld be numberrefined oil as known to the market without deodorisation.
The question in this case was whether the crude PVC films manufactured by the appellant therein were goods within the meaning of Section 3.
The excise authorities have number pointed out any instance where these poles were sold by the Board.
The aluminium cans at the point at which the excise duty was sought to be levied were in a crude and elementary form incapable of being employed in that state as companyponents in a flashlights.
The fact that Kerala Board purchases these poles from companytractors clearly establishes the marketability of these poles.
On the said facts, it was held by this Court that the aluminium cans in their aforesaid elementary and unfinished form were number capable of sale to a companysumer and hence number marketable number were they ever marketed.
The respondent mills was engaged in the manufacture of vegetable product known as Vanaspati.
for the manufacture of flashlights.
The ratio of this decision is that the aluminium cans, which were sought to be taxed, were, in that state number marketable.
They paid excise duty on the sugar manufactured by them.
The crude PVC films represented an intermediate product used for captive companysumption in manufacture of leather cloth, laminate jute mattings and PVC tapes.
They are, therefore, number marketable and hence, number goods within the meaning of and for the purposes of Central Excise Act.
The only companytention of Sri Shanti Bhushan, learned Counsel for the appellant is this the poles manufactured by the appellant are of various sizes, strength and dimensions.
All the poles manufactured by the Board are utilised for its own purposes.
It was found by the appellate companylector on the material produced by the appellants that crude PVC films were number marketable products.
The second decision relied upon is in South Bihar Sugar Mills Ltd, v. Union of India .
There are about 100 types of poles.
Vanaspati was subject to duty.
While companyplying with the said demand, the appellant protested that the said aluminium cans cannot be described as goods for the purpose of levying excise duty inasmuch as they are number marketable and that they are prepared only for the purpose of flashlights manufactured by the appellant.
They are number sold in the market.
In fact, they have numbermarket and are number known to the market.
The cans had sharp uneven edges and before they companyld be used as a companyponent in making the flashlight, these cans had to undergo various processes such as trimming, threading and redrawing.
The appellants were engaged in the manufacture of sugar by carbonation process.
