TMI Blog1989 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... each National Test House within one week after such drawing; c) On receipt of the report from the National Test House, copies of such report should be given to the petitioner and the respondent authorities. It was further directed that order, if any, made in the adjudication proceedings would abide by the result of the Rule. Further, so far as the taking of the materials in future for captive consumption is concerned the petitioner would be at liberty to do so without payment of any excise duty but they should furnish Bank Guarantee for 50% of the amount of Duty assessed for such materials for each month to the satisfaction of the Collector of Central Excise, Calcutta and such bank guarantee would be furnished within three weeks from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of production and are processed in an integrated process in manufacture of plywood. Such U.F./P.F. solution are only intermediate inputs and are prepared at an intermediate stage in the course of manufacture of plywood and are not final or finished product and there can be no Central Excise duty and such duty cannot be levied. It is made clear by the petitioner that under the Central Excise Act, provisions and/or Rules thereunder including the provisions of Rules 9 and 49, the Central Excise duty can be levied and/or collected only if the goods are removed from the factory and there is a specific averment in the writ petition that the said solution is not removed from the factory of the writ petitioner, but are used in the manufacture of pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er commodities falling under different items within the same factory as removal within the meaning and scope of Rules 9 and 49 of the said Rules. Further, by Section 51 of the said Finance Act, 1982 the provisions of the aforesaid Notification was given retrospective effect from the date on which Central Excise Rules, 1944 came into force. The respondents contend that the petitioner company manufactures U.F. resin and P.F. resin in liquid form falling under Item No. 15A(1) for use as adhesive for manufacture of plywood falling under Tariff 16(B) and that the change made in tariff description of Item No. 15A(1) in Finance Act, 1982 as per clause (a) of Explanation III the liquid or pasty emulsion, dispersion or solution of artificial or synt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e covered by the Item No. 15A. Attention of the Court has also been drawn to a recent decision reported in 1986 (24) E.L.T. 169 (S.C.) (Union Carbide India Ltd. v. Union of India Ors.) wherein it was held that in order to attract excise duty, the article manufactured must be capable of sale to a consumer and articles in crude or elementary form are not dutiable as those are merely intermediate products and not goods. Entry 84 of List 1 of Schedule VII to the Constitution specifically speaks of "duties of excise on tobacco and other goods manufactured or produced in India" and it is now well accepted that excise duty is an indirect tax, in which the burden of the imposition is passed on to the ultimate consumer. 7. Attention of the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olutions are not such commodities having identifiable and as to marketability. Said goods are essentially used in the process of manufacture of the plywood and those are really intermediaries and intermediate products and they are not attracting excise duty as observed in the aforesaid decisions as disclosed above and further those goods have no shelf-life and are not marketable. 9. This Court does not find anything about the unconstitutionality for grant of the declaration with regard to the Rules as challenged in the writ petition. This Court clearly finds that the product as covered by the writ petitioner in this case do not attract excise duty and there is no bar and/or impediment to grant the reliefs prayed for in such regard. Questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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