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TMI Blog2012 (7) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the old vehicles. The unit was visited by the officers of the department in 2001 and it was noticed that the assessee was not paying central excise duty on the components manufactured and supplied to their divisional office and also not paying any duty on the scrap generated during the course of manufacture. Accordingly, a show cause notice dated 1.3.2002 was issued to the appellant unit located at Chikalthana in Aurangabad Commissionerate, demanding duty on the components and the scrap manufactured by them. The show cause notice was confirmed by the adjudicating authority vide his order dated 11.6.2003 confirming the duty amount of the bus body components and the scrap cleared by them and also imposing penalty under Section 11AC read with Rule 173Q and Rule 25 of the Central Excise Rules. The appellants challenged the order-in-original before the Commissioner of Central Excise (Appeals), Aurangabad, who vide the impugned order rejected their appeal against which the appellants are in appeal before us. 3. A similar show cause notice was also issued to the appellant unit at Dapodi falling under Pune Commissionerate, demanding duty on 24 items manufactured by them as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, bars, angles etc. which are subjected to the process of cutting, bending, riveting etc. according to the design of the bus bodies. Thereafter, the bus body is built piece by piece. He stated that in the year 1993, the excise officers of the Aurangabad Commissionerate had issued a show cause notice dated 5.8.1993 contending that in the process of building the bus bodies, component parts come into existence by the said process of cutting, bending and riveting of the said bars and angles and since the final products were exempt from duty, the duty was payable on such components. The said show cause was adjudicated by the original authority vide his order dated 23.12.1993 under which the demand proceedings were dropped and it was held that the said processes do not result in the emergence of parts which can be bought and sold in the market since the same are specifically designed for and according to the requirement of the appellants own buses and the said order-in-original was not challenged by the department and, therefore, became final and in fact after the said order, the appellants surrendered their central excise registration. Then in the year 2002, a show cause notice was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the following case law in support of his contention:- a) Hindustan Ferodo Ltd. vs. CCE, Bombay 1997 (89) ELT 16 (SC); b) Bata India Ltd. vs. CCE, New Delhi 2010 (252) ELT 492 (SC); c) UOI vs. Sonic Electrochem (P) Ltd. 2002 (145) ELT 274 (SC); d) Sundaram Clayton Ltd. vs. CCE, Chennai 2009 (233) ELT 530 (Tri.-Chennai), and e) Automobile Corporation of Goa Ltd. vs. CCE, Goa 2006 (197) ELT 564 (Tri.-Mumbai). He finally concluded that in view of the above case law, the components on which duty has been demanded by the department are not marketable and, therefore, no duty is liable to be paid by them and accordingly the appeals filed by them need to be allowed. 7. The learned Additional Commissioner (AR) submitted that the issue involved in the appeal is whether the bus body parts, viz. aluminium window frames, driver door frame, passenger door frame, windshield frame, battery box stand, MS ladder, MS engine bonnet etc. are dutiable and whether the scrap generated during the course of manufacture of the parts is liable to duty. He submitted that these parts are distinctly identifiable bus body parts and are standardized for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that in case of unit in Aurangabad Commissionerate, a show cause notice dated 5.8.1993 was issued to the appellant for denying their claim of nil rate of duty and demanding duty on bus body component. This show cause notice was dropped by the Assistant Commissioner vide order No.133/93 dated 23.12.1993. The Assistant Commissioner held as under:- I examined the said bus body components in light of the above concept. The process goes like this. They procure the required material in the form of rods, sheets, angles etc. Then they will bend, cut and straighten according to the design of the components. These are filled to the body by nuts and bolts or riveted or welded accordingly. These parts are made according to the design of the bus body. The design of the bus body varies from one manufacturer to another manufacturer. To put it in another way, these designs are prepared in house. They body is custom designed by each body builder. So there is no chance of these goods being sold in the market for the reason that they can t be fit into any other body of different design. Thus, these parts are not marketable. Hence, they can t be called as goods for Central Excise purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny party and, therefore, this case is distinguishable. 13. In the case of Medley Pharmaceuticals Ltd. vs. CCE, Daman (supra), the issue before the Hon ble Supreme Court was valuation of physician samples distributed as free samples. It was pleaded by the assessee that physician samples are not excisable goods when sale thereof is prohibited under the Drugs & Cosmetics Act. It was held by the Court (para 8) that product liabile to excise duty must be marketable on the condition in which it emerges. Marketable means saleable or suitable for sale and goods need not be marketed. It was also observed by the Court (para 29) that market of pharmaceutical company is enhanced substantially by distribution of free samples. In other words, the distribution of such physician samples serves as marketing tool in the hands of pharmaceutical companies. The product involved in the case before us are not samples but components supplied to divisions for repairs and maintenances of buses. The facts of this case are distinguishable from the present case. 14. The Revenue also relied on the case of CCE, Meerut-II vs. Sundstrand Forms P. Ltd. (supra). The issue involved was dutiability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constitute goods twin tests have to be satisfied, namely, process constituting manufacture and secondly marketability. In the present case the second test of marketability is in issue. It is well-settled that goods are manufactured with the object of being sold in the market. If the goods are not capable of being sold then the test of marketability is not fulfilled. Further, the burden is on the Department to prove whether there is the process which constitutes manufacture and secondly whether the product is marketable. 4. Coming to the facts of the present case we have examined the literature concerning Port Engineering as well as the contract entered into by the Port Trust which indicates that concrete armour blocks are essentially in prisomoid form. These blocks or units are made to order. They are of certain specifications. They are harbour or location specific. It would depend on the water level required to be maintained in the harbour. There is no evidence to show that these blocks could be used in any other harbour. This is where we have stated that each unit is meant for a particular location. Lastly, in the present case there is no evidence coming from the side of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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