2003 (10) TMI 47 - SC - Central Excise

Whether inclusion of an item in the entries to the First Schedule to the Tariff Act per se makes the item exigible to excise duty ?

Held that:- In the present case it is not possible to say that cinder satisfies the requirement of being manufactured in India.

It is clear that to be subjected to levy of excise duty 'excisable goods' must be produced or manufactured in India. For being produced and manufactured in India the raw material should have gone through the process of transformation into a new product by skilful manipulation. Excise duty is an incidence of manufacture and, therefore, it is essential that the product sought to be subjected to excise duty should have gone though the process of manufacture. Cinder cannot be said to have gone through any process of manufacture, therefore, it cannot be subjected to levy of excise duty.

The onus to show that particular goods on which excise duty is sought to be levied have gone through the process of manufacture in India is on the revenue. They have done nothing to discharge this onus. For this reason alone they must fail. Thus as cinder cannot be subjected to levy of excise duty because it is not an item of goods which has been subjected to process of manufacture, it is not necessary for us to go into any other point.The result is that the contention of the revenue that cinder is liable to payment of excise duty is hereby rejected.