TMI Blog1989 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... was shown in Col. 2 among 'other organic chemicals' produced by the petitioner-company and exemption was claimed in respect of the said chemical as 'non-excisable'. 3. Thereafter, two show cause notices were issued by the Superintendent of Central Excise Hoskote Range, Bangalore-46 on 25-8-1987 (Annexures- 'C' and 'D'), as to why 'BMS' should not be classified under the sub-heading 2942.00 and for the latter period under the sub-heading - 2913.00. After an elaborate reply filed by the petitioner to the said notices and affording a personal hearing to the petitioner, an adjudication order was made by the Assistant Collector of Central Excise, Cantonment Division, on 25-2-1988, as per Annexure - G. 4. "BMS" manufactured by the petitioner-company was held an excisable product classifiable under "other organic compounds" under the heading - 2913.00 upto 9-2-1987 and under heading 2942.00 from 10-2-1987 onwards. 5. This order was challenged by the petitioner-company before this Court in W.P. No. 7428 of 1988. By order dated 21/27th July 1988 this court allowed the writ petition and quashed the order dated 25-2-1988 and remanded the matter to the second respondent to make a fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an organic chemical and is classified as such by the petitioner in the classification list filed by the petitioner and it, therefore, attracts levy of excise duty falling under 'other organic compounds' under the Tariff -Act; and, (ii) that under Rule (2) of the Rules of interpretation framed under the Tariff Act, marketability or otherwise of a product is not a criterion for its classification. It is on these grounds that 'BMS' was held an excisable product and classifiable under the heading 'other organic compounds'. 10. Sri Pochkhanawalla, learned Counsel, who argued the case of the petitioner on the earlier occasion also, challenged this order and has argued that the de novo order being contrary to the three decisions of the Supreme Court referred to above, is liable to be quashed. It was argued that it was only after accepting the contention of the petitioner on the basis of the said decisions, this Court remanded the matter to the Adjudicating-Authority to make a fresh order and the authority was, therefore, bound to decide the issue in the light of the High Court's order. 11. In the record of personal-hearing, produced as Annexure-'F' to the writ petition, it is seen t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Schedule; (iii) the Asst. Collector deliberately avoided making reference to the three Supreme Court decisions relied upon before him as to the application of the ratio as regards the test of marketability; (iv) having realised that no evidence or material was produced by the Department as to the marketability of the goods in question, the Assistant Collector tried to avoid the issue in an ingeneous manner and in defiance of the specific direction given by this Court in W.P. 7428/88; and (v) it was lastly argued that the two decisions rendered subsequently by the Supreme Court in Bhor Industries Ltd. v. Collector of Central Excise 1989 (40) E.L.T. 280 (S.C.) and in the Collector of Central Excise v. Ambalal Sarabhai Enterprises 1989 (43) E.L.T. 214 (SC) reiterate the law as to the marketability test laid down by the Supreme Court earlier, and this Court should, therefore, quash the impugned order. 17. A faint attempt was made on behalf of the Department by Sri Ashok Haranahalli to justify the order made by the second respondent. It was also his argument that after the Tariff Act, 1985, came into force, the marketability test is not a criteria to decide the exigibility to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held, "to become goods an article must be something which can ordinarily given to the market to be bought and sold". 21. Same was the view taken by the Supreme Court in yet another decision in Geep Industrial Syndicate Ltd. v. Central Government and Others -1987 (31) E.L.T. 365 (S.C.). 22. All these three decisions were relied upon by the petitioner before both the Assistant Collector, who passed the two orders, the latter being the one impugned in this writ petition. 23. Apart from the fact that the second respondent had to apply the marketability test to the facts of the case, the defiant attitude of the second respondent in trying to avoid the real issue was demonstrated by the petitioner's Counsel that he (second respondent) has not even made a reference to the three decisions of the Supreme Court relied upon by them before the Adjudicating Authority and referred to by me in the earlier order made in W.P. No. 7428/88. It was, therefore, argued vehemently by Sri Pochkhanawalla that the Assistant Collector's order, made in defiance of the order made by this Court and the direction given in W.P. No. 7428/88 deserves to be quashed by this Court. 24. In the absence of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to find out whether the goods in dispute are articles known in the market as separate, distinct and identifiable commodities and whether any tariff duty should be levied merely following the description of the article in the Schedule without finding out whether those goods are things which can ordinarily come to the market to be bought and sold. 28. In Ambalal Sarabhai's case referred to above, the question was whether starch hydrolysate is goods? The contention of the petitioner-assessee was that the starch hydrolysate manufactured by the Company was captively consumed in the manufacture of sorbitol falling under Item 68 of the Central Excise Tariff. The Supreme Court held, that while attempting to levy duty on such transient items which are captively consumed in the manufacture of another finished produce, it must be proved and established by the Department that even such items or articles are known in the market as distinct and separate articles having separate use, and therefore, would still be 'goods' to attract levy of the Central Excise Duty. It was further held, though actual sale is not necessary, evidence must be produced by the Department that the goods, in fact, are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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