Civil Appeal No 532NT of 1989
From the Judgment and Order dated 42
1987 of the Allahabad High Court in STR No 298 of 1986
AND Civil Appeal No 533 NT of 1989
From the Judgment and Order dated 263
1987 of the Allahabad High Court in Sales Tax Revision No 454 of 1986
SC Manchanda RS Rana and Ashok K Srivastava for the Appellant
RC Mishra and Dr Meera Aggarwal for the Respondent in CA No 532 of 1989
Raja Ram Aggarwal Vijay Hansaria and Sunil K Jain for the Respondent in CA No 533 of 1989
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
Special leave granted and these appeals are disposed of by the judgment herein
These appeals are from the judgments and orders of the High Court of Allahabad dated 4th February 1987 and March 26 1987 respectively
These involve a common question
The facts of the appeal arising out of Special Leave Petition No 1293 of 1988 and the facts of the appeal arising out of Special Leave Petition No 1296 of 1988 are similar
In order to appreciate the contentions raised herein it would be appropriate to deal with the facts of the appeal arising out of Special Leave Petition No 1293 of 1988
The assessee is engaged in repairing and refilling of cotton bowl on the shafts which are used as part of calendering machine in the textile industry
The cotton bowl is a shaft made of steel on which a thick layer of cotton is pasted and 425 affixed
It is used in the textile finishing industries as an essential part of calendering machine
In the course of its use the cotton pasted on the shaft loses its thickness and shape and after some time it requires repairing and refilling
The assessee in this case moved an application under section 35 of the UP Sales Tax Act 1948 hereinaf ter called the Act 
It may be mentioned that Section 35 was added by the UP Sales Tax Amendment and Validation Act No 23 of 1976
Section 35 of the said Act has been amended by Section 31 of the UP Act 12 of 1979
Section 35 provides for determination of disputed ques tions by moving an application before the Commissioner of Sales Tax
The relevant part of the said section as it stood at the relevant time was as follows 35
Determination of disputed questions 1 If any question arises otherwise than in a proceeding pending before a court or before an Assessing Authority under Section 7 or Section 21 whether for the purposes of this Act a any person or association of persons society club firm company corporation undertaking or Government Department is a dealer or b any particular thing done to any goods amounts to or results in the manufacture of goods within the meaning of that term or c any transaction is a sale or purchase and if so the sale or purchase price as the case may be therefore or d any particular dealer is required to obtain or to apply for the renewal of registration  or e any tax is payable in respect of any particular sale or purchase and if so the rate thereof the person or the dealer concerned may after depositing the fee specified in Section 32 submit an application to the Commissioner of Sales Tax along with such documents as may be prescribed
426 2 The Commissioner of Sales Tax shall after giving the applicant an opportunity of being heard decide as he deems fit the question so arising Provided that before giving such decision the Commissioner of Sales Tax may in his discretion ask an officer subordinate to him to make such inquiries as he considers necessary for the decision of the question
3 No decision of the Commissioner of Sales Tax under this section shall affect the validity or operation of any order passed earlier by any Assessing Authority Appellate Author ity Revising Authority or the Tribunal
4 No question which arises from an order already passed in the case of the applicant by any authority under this Act or the Tribunal shall be entertained for determination under this section
5 A decision given by the Commissioner of Sales Tax under this section shall subject to an appeal to the Tribunal be final
6 XXX XXX XXX
 The question that arises in these appeals before us is the true interpretation of sub section 5 of section 35 of the Act namely whether a revision shall lie to the High Court from the decision of the Commissioner under section 35 of the Act which has been the subjectmatter of an appeal before the Tribunal
The respondent dealer moved an applica tion under section 35 of the Act and the decision was ren dered in terms of the said section
The decision inter alia included the questions whether the job of repairing and refilling of cotton bowl and the process involved there in amounted to manufacture or sale within the meaning of the Act
The Commissioner of Sales Tax by his order dated 10th June 1985 decided both the questions against the assessee
Aggrieved thereby the assessee had preferred an appeal before the Sales Tax Tribunal
The Tribunal by its order dated 14th November 1985 allowed the appeal in part
The Tribunal held that the process of repairing and refill ing of cotton bowls of the customers did not amount to manufacture as defined under section 2e i of the Act
It further held that such an activity of the assessee amounted to sale as defined under section 2h of the Act as amend ed by the UP Sales Tax Amendment and Validation Act 1985It is against this decision of the Sales Tax Tribunal that the Commissioner of Sales Tax had preferred revision to the High Court
The High Court went into the question whether further revision lay to the High Court
The High Court noticed of the terms of section 35 noted hereinbefore which provided by sub section 5 of section 35 that a decision given by the Commissioner of Sales Tax under that section subject to an appeal to the Tribunal shah be final
Emphasis supplied The High Court examined the question whether further revi sion lay and answered it in the negative
Therefore we were concerned in these appeals with the question whether at the relevant time in terms of section 35 of the Act any further revision lay to the High Court from the decision of the Commissioner which has been the subject matter of appeal before the Tribunal
The High Court came to the conclusion that having regard to the scheme of the provisions and the amendment made by the UP Act 12 of 1979 and in view of the decision of the Division Bench of the High Court in Indo Lube Refineries vs Sales Tax Officer Sector I Gorakhpur 1987 66 STC 145 no further revision lay to the High Court from the order of the Tribunal
In that view of the matter the High Court dismissed the revision
Aggrieved thereby the Commissioner has come up in appeal before this Court in these two appeals
Shri Manchanda for the appellants and Shri Raja Ram Agarwal for the respondents both submitted that the judgment under appeal is not correct though for different reasons
It is necessary to refer to the scheme of the Act and the amendments from time to time effected therein
Broadly speaking the assessment is made by the Sales Tax Officer in terms of section 3 and other allied sections
Section 9 of the Act deals with appeals and provides that any dealer or other person aggrieved by the order made by the Assessing Authority other than an order mentioned in section 10 A may within 30 days from the date of the service of the copy of the order or appeal to such authority as may be pre scribed request the appellate authority in writing for summary disposal of his appeal
The other consequential provisions of law need not at the present moment be examined in detail
Section 10 provides for Sales Tax Tribunal
The section was substituted at first by Act 12 of 1979 and thereafter by Act 22 of 1984
After the substitution by the Act 12 of 1979 the Act has provided that there shall be a Sales Tax Tribunal consisting of a President and such other members as the State Government may from time to time deem it necessary to appoint from amongst persons who have been or who are qualified to be judges of the High Court and persons who hold or have held a post not below the rank of Deputy Commissioner of Sales Tax provided that when the 428 Tribunal consisted of one or more persons who have been judges of a High Court then he or one of them should be appointed the President
Sub section 5 of Section 10 authorises the Tribunal as the case may be to confirm cancel or vary such order
Sub section 2 of Section 10 stipulates that any person aggrieved by an order passed by an appellate authority under section 9 or by the revising authority under section 10 B or by a decision given by the Commissioner of Sales Tax under section 35 may within six months from the date of service of the copy of such order or decision on him prefer an appeal to the Tribunal
Sub section 10a of Section 10 provides that an appeal against the order of the Appellate Authority under section 9 shall be heard and disposed of inter alia i by a bench of one member whether such order is passed by an Assistant Commis sioner Judicial the amount of the tax fee or penalty in dispute does not exceed five thousand rupees and ii by a bench of two members in any other case
An appeal against the order passed under section 10 B should be heard and disposed of by a bench of two members
An appeal against an order passed under section 35 shall be heard and disposed of by a bench of three members
The President has the power to direct an appeal to be heard and decided by a larger bench and transfer an appeal from one bench to another
There was a subsequent amendment by section 10 of the UP Act 22 of 1984
Section 10 as it stands after amendment by Act 22 of 1984 is as follows 10
Sales Tax Tribunal 1 There shall be a Sales Tax Tribunal consisting of such members including a President as the State Government may from time to time deem it necessary to appoint from amongst a the persons who are qualified to be Judges of the High Court and b the persons belonging to the Uttar Pradesh Sales Tax Service who hold or have held a post not below the rank of Deputy Commissioner of Sales Tax Provided that i where the Tribunal consists of one or more persons who is or are members of the Uttar Pradesh Higher Judicial Service then he or the senior most amongst them shall be appointed President 429 ii no person shall be appointed from amongst advo cates unless he has paid income tax on income from such profession exclusive of all other incomes in each of the five consecutive years preceding such appointment
1 A The State Government may prescribe such other qualifi cations or conditions for the appointment of the President and other members of the Tribunal as it may deem fit
1 B The provisions of Rule 56 of the Uttar Pradesh Funda mental Rules shall continue to apply to every member of the Tribunal including the President whether appointed before or after the commencement of the Uttar Pradesh Sales Tax Amendment and Validation Act 1983 as they apply to any other Government servant Provided that a member of the Tribunal including the President appointed before the commence of the Uttar Pradesh Sales Tax Amendment and Validation Act 1983 may continue as such till he attains the age of sixty years
2 Any person aggrieved by an order passed by an Appellate Authority under Section 9 other than an order referred to in sub section 4 A of that said section or by the Revis ing Authority under section 10 B or by the Commissioner of Sales Tax under sub section 3 of section 4 A or by a decision given by the Commissioner of Sales Tax under Sec tion 35 may within six months from the date of service of the copy of such order or decision on him prefer an appeal to the Tribunal Provided that where the disputed amount of tax fee or penalty does not exceed one thousand rupees the appellant may at his option request the Tribunal in writ ing for summary disposal of his appeal whereupon the Tribu nal may decide the appeal accordingly
Explanation For the purpose of this sub section the expression any person  in relation to any order passed by an authority other than the Commissioner of Sales Tax 430 includes the Commissioner of Sales Tax
2 A The manner and procedure of summary disposal of appeal shall be such as may be prescribed
3 Section 5 of the  shall apply to appeals or other applications under this section
4 The Tribunal may at any stage after giving the appel lant a reasonable opportunity of being heard dismiss the appeal
5 The Tribunal may if it has not already dismissed the appeal under sub section 4 after calling for and examin ing the relevant records and after giving the parties a reasonable opportunity of being heard or as the case may be after following the procedure prescribed under subsection 2 A a confirm cancel or vary such order or b set aside the order and direct the assessing or appellate or revisional authority or the Commissioner of Sales Tax as the case may be to pass a fresh order after such further inquiry if any as may be specified or c order such amount of tax fee or penalty or other money as may have been realised in excess of the due amount to be refunded according to the provisions of this Act
Explanation The power to vary an order referred to in clause a includes the power to vary the order by reducing or enhancing the amount of assessment or penalty
6 Where an appeal under this section has been filed the Tribunal may on the application of the appellant moved within thirty days from the filing of such appeal after giving the parties a reasonable opportunity of being heard stay the operation of the order appealed against or the recovery of the disputed amount of any tax fee or penalty payableor refund of the amount due or proceedings for re assessment under the order appealed against till the dis posal of the appeal 431 Provided that i no application for stay of recovery of any disput ed amount of tax fee or penalty shall be entertained unless the applicant has furnished satisfactory proof of the pay ment of not less than one third of such disputed amount in addition to the amount required to be deposited under sub section 1 of Section 9 ii the Tribunal may or special and adequate reasons to be recorded in writing waive or relax the requirement of clause i regarding payment of one third of such disputed amount
8 No order passed under this section for the stay of recovery of tax fee or penalty shall remain in force for more than thirty days unless the appellant furnishes ade quate security to the satisfaction of assessing authority concerned for payment of the outstanding amount
9 The members of the Tribunal shall sit in such benches of one two or more members as may be constituted from time to time and do such work of the Tribunal as may subject to sub section 1 and the rules be allotted to them by order or in accordance with the directions of the President of the Tribunal
10a An appeal against the order of appellate authority under section 9 shall be heard and disposed of i by a bench of two members where such order is passed by a Deputy Commissioner Appeals or the amount of tax fee or penalty in dispute exceeds ten thousand rupees ii by a single member in any other case
b An appeal against an order passed under Section 10 B shall be heard and disposed of by a bench of two members
c An appeal against an order passed under sub section 3 of Section 4 A or a decision given under Section 35 which shall be filed before the President shall be heard and 432 disposed of by a bench of three members
d The President may if he so thinks fit i direct an appeal to be heard and decided by a larger bench ii transfer an appeal from one bench to another bench
11 The place of sitting and procedure of and the manner of presenting appeals and other documents to the Tribunal shall subject to the rules be such as the Tribunal may deem fit to adopt
12 The decision of case heard by a bench shall be in accordance with the opinion of the majority
Where the members are equally divided the President of the Tribunal may a if he was not a member of such bench give his own opinion or refer the case for the opinion of another member whereupon the case shall be decided in accordance with such opinions or b from a larger bench
 The section has been set out in extend in order to appreciate the contentions raised
As will be apparent from the aforesaid sub section 10c that an appeal against an order passed or a decision given under section 35 shall be filed before the President and shall be heard and disposed of by a bench of three members
So far as revision is concerned this was the subject matter of section 11 of the Act
The Sales Tax Act of 1948 under went an amendment in 1984 so far as revision is concerned and as it stands today and so far as it is material for the present purpose is as follows 11
Revision by High Court in special cases 1 Any person aggrieved by an order made under subsection 4 or sub section 5 of section 10 other than an order under sub section 2 of that section summarily dis 433 posing of the appeal or by an order passed under Section 22 by the Tribunal may within ninety days from the date of service of such order apply to the High Court for revision of such order on the ground that the case involves any question of law Provided that where such order was served on the person concerned at any time before the date of commencement of this section as substituted by the Uttar Pradesh Taxa tion Laws Amendment and Validation Act 1978 hereinafter in this section referred to as the said date and the period of one hundred and twenty days for making the appli cation as referred to in this sub section as it existed before the said date had not expired on the said date the person aggrieved may apply for revision within sixty days from the said date
 The other sub sections are not relevant for the present purpose
Section 10 A deals with orders against which no appeal or revision lies and Section 10 B stands for revision by the Commissioner of Sales Tax
Section 11 as mentioned herein before stands for revision by the High Court and has been amended from time to time
In the aforesaid background the question posed in these appeals will have to be examined in the light of the deci sion of the High Court
The High Court in its judgment under appeal after analysing the provisions of Section 35 observed that the Commissioner entered into the determination of the disputed questions
Sub clause 2 of Section 35 of the Act according to the High Court enjoins on the Commissioner to decide the questions referred to him as he deems fit after giving the applicant an opportunity of being heard
Under sub clause 5 of Section 35 it has been stated that the decision given by the Commissioner of Sales Tax shall sub ject to an appeal to the Tribunal be final
The High Court while examining the section noticed that when an appeal against the order passed under Section 35 of the Act is before the Tribunal the appeal is to be heard and disposed of by a bench of three members although in regard to other appeals before the Tribunal these can be disposed of even by a single member or by a bench consisting of two members
The High Court noted that under subclause 5 of section 35 of the Act prior to its amendment brought out by UP Act No 12 of 1979 an appeal used to lie to the High Court against the order of the Commissioner of the Sales Tax
By the 434 aforesaid amendment brought out by UP Act No 12 of 1979 under clause 5 of section 35 the words High Court have been deleted and substituted by the word Tribunal
The learned Judge of the High Court observed that an appeal before the Tribunal was specially treated by the legislature and it was enjoined that it should be disposed of by a bench of not less than three members
The learned Judge noted that the Division Bench of the High Court in the case of Indo Lube Refineries vs Sales Tax Officer Sector l Gorakhpur 1987 66 STC 145 had taken the view that an order passed by the Commissioner under Section 35 of the Act was an adminis trative order and in so doing he did not act as a Tribunal
In this connection reference may be made to the Division Bench decision of the High Court of Allahabad in Indo Lube Refineries supra
There the petitioner filed a writ peti tion contending that as the order of the Commissioner of Sales Tax had become final under sub section 5 of section 35 of the UP Sales Tax Act 1948 it was binding on the Revenue as well as the petitioner and it was open to the Sales Tax Officer who was inferior in hierarchy to ignore the order of the Commissioner in passing the assessment order
Dismissing the petition it was held by the High Court that the Sales Tax Act had made a clear distinction between judicial proceedings which had to be conducted and concluded in accordance with sections 7 9 10 10 B 21 and 35 and the High Court noted that the proceedings under sections 7 to 10 B were of different character than the one contemplated under section 35 and it excluded a proceeding pending before a court or before an assessing authority under section 7 or section 21
It was a type of miscellane ous jurisdiction it was held to be exercised only in given circumstances or situations
In respect of proceedings under section 7 which will take within itself an appeal and revision the legislature had not made the Commissioner a final arbiter
The Sales Tax Officers or the assessing authority while determining the turnover with a view to assess tax liability acts as a tribunal
Likewise the appellant authority under section 9 and the Tribunal under section 10 of the Act are tribunals
The Commissioner did not act as a tribunal while dealing with an application under section 35
The nature of his jurisdiction is adminis trative according to the High Court
The legislature ac cording to the High Court has used the language otherwise than in a proceeding pending before a court or before an assessing authority under section 7 or 21 deliberately with a view to maintain and preserve the sanctity of the judicial proceedings under the Act
The word final used in sub section 5 of section 35 is only with regard to the pro ceedings contemplated by that section and the order of the Commissioner 435 would be final
But this will not bar the other authorities under the Act from deciding the controversy before it on its own by looking to the evidence and considering the question of law which comes before it
Therefore the High Court rejected the submission that the order of the Commissioner of Sales Tax is binding in the assessment proceedings and those proceedings have to be decided in accordance with the same
It is difficult to accept the position that under sec tion 35 which empowers the Commissioner to determine disput ed questions and the Commissioner under sub section 2 after giving the parties opportunity of being heard decides a question his order can be called to be an administrative order
In our opinion the very language of the section which enjoins a decision by the Commissioner envisages that the decision is quasi judicial or judicial and cannot be characterised as administrative
Whether that decision will be binding on other party and what will be the effect of the decision of the Commissioner of Sales Tax in pending assess ment proceedings is another matter and we are not concerned in these appeals with that question
We are concerned with the question whether on the language of the section a revi sion is entertainable from the decision of the Commissioner which has been subjected to an appeal to the Tribunal
In our opinion in view of the language used specifically in the absence of a provision that such a revision will be maintainable such revision will not be
Sub section 5 of section 35 after the amendment states that the decision of the Commissioner of Sales Tax under this section shall subject to an appeal to the Tribunal be final
In view of the language of that section in our opinion it cannot contemplated a further revision to the High Court against a decision of the Tribunal
In Kydd vs Watch Committee of City of Liverpool  331 32 Lord Lorebum LC construing the provisions of section 11 of the Police Act 1890 of England which provided an appeal to quarter sessions as to the amount of a constable s pension and also stipu lated that the court shall make an order which shall be just and final observed Where it says speaking of such an order that it is to be final I think it means there is to be an end of the busi ness at quarter sessions    The Judicial Committee in Maung Ba Thaw vs Ma Pin 1933 34 61 LR Indian Appeals 158 while dealing with the Provincial Insolvency 436 Act observed that when a fight of appeal was given to any of the ordinary courts of the country the procedure orders and decrees of that court would be governed by the ordinary rules of the Civil Procedure Code and therefore an appeal to Privy Council was maintainable by the decision of the High Court
Here in the instant case the right of appeal has been given under the Act not to any ordinary court of the country under the Code of Civil Procedure but to the courts enumer ated under the Sales Tax Act and the revision is contemplat ed under the provisions of the Sales Tax Act Final  in the section means that it is final and under the Act subject to the limited procedure contemplated under the Act
The inten tion of the legislature in our opinion in the amended scheme of the Act is clear and manifest and meaningful and the scheme of the Act is to regulate the determination of the question as to the assessability and liability and questions in connection thereto
The observations of Lord Lorebum LC were referred to in South Asia Industries Pvt Ltd vs SB Sarup Singh  where this Court observed at page 766 of the report that the expression final prima facie meant that an order passed on appeal under the Act was conclusive and no further appeal lay
A right to revision under the Act is a right given by the Act
In this connection observations in Ms Jetha Bai and Sons Jew and others vs Ms Sunderdas Rathenai and others may be relied on
We have noted that section 11 of the Act after the amendment stipulated that any person being aggrieved by an order made under sub section 4 or sub section 5 of Section 10 other than an order under sub section 2 of that section summarily disposing of the appeal or by an order passed under Section 22 by the Tribunal may apply for revision
Where an appeal is not disposed of summarily but by a decision as in this case and where the appeal is contemplated in such a situation to be heard by a bench of three Judges in our opinion if any further revision would have laid from the decision of the Tribunal then such deci sion of the Commissioner would not have been made final by sub section 5 of Section 35
It may be mentioned that the Tribunal after exhaustively considering the contentions of the case allowed the appeal in part and the order of the Commissioner of Sales Tax was modified by holding that the process of repairing and refilling of the cotton bowls of the customers did not amount to manufacture as defined in Section 2e 1 of the Act as amended by the UP Sales Tax Amendment and Validation Act 1985 with effect from 2nd February 1985
In the scheme of the Act in our opinion it was enjoined that such an appeal is to be heard by a bench of three judges
437 Where it was provided that the decision of the Commissioner would be final subject to an appeal to the Tribunal in our opinion it would be incorrect to contemplate that in such a situation a further revision under Section 17 lay to the High Court
Revision to the High Court in special cases under Section 11 is contemplated on the ground that the case involved a question of law
It may be mentioned that the High Court had mentioned that under sub clause 5 of sec tion 35 of the Act prior to its amendment that an appeal used to lie to the High Court against an order of the Com missioner of Sales Tax
By the aforesaid amendment brought forward by the UP Act 12 of 1979 under clause 5 of Section 35 the words High Court have been deleted and substituted by the word Tribunal
It appears that the High Court was right therefore in holding that an appeal to the Tribunal against an order of the Commissioner lies
So far as the appeal before the Tribunal against the order passed under section 35 is concerned special treatment has been provided for by the legislature
The Tribunal has come in place of the High Court in hearing the appeal
In such a situation to contemplate when the language of the section envisages that the order of the Commissioner would be final subject to an appeal to the Tribunal that a further revision lay to the High Court would be unwarranted
As mentioned hereinbefore we have to find out the intention of the Legislature in such a situation
The intention of the Legis lature is a slippery phrase as observed in Aron Salomon vs A Salomon and Company Ltd   38 see also observations in Lord Howard De Walden vs Inland Revenue Commissioners 1948 All England Reports page 825
In such cases it is better to find out the intention of the legisla ture from the words used by the natural meaning of the words and spirit and reason of the law
See Cross on Statutory Interpretation Second Edition page 21
Having regard to the scheme manifested from the amend ment that is to say to make the Commissioner s decision final subject to an appeal to the Tribunal where the Tribu nal is enjoined to hear such an appeal by a bench of three members and where revision is provided only in special cases in our opinion it would be improper to interpret the spirit and reason of that law in such a way as to enjoin that a further revision lay to the High Court under section 11 of the Act
In our opinion therefore the High Court was right that no further revision in such a situation lies to the High Court
This however does not eliminate the cor rection by the High Court
In an appropriate case by exer cise of a writ of certiora under Article 226 of the Consti tution it exercises superintendence over all courts and tribunals throughout the 438 territory
See in this connection Re Gilmore s Application 1957 1 All England Reports 796
We are not concerned with that situation in these appeals
In that view of the matter it appears to us that the High Court is right in so far as it held that no revision lay to the High Court
These appeals therefore fail and are dismissed
Par ties will pay and bear their own costs
NVK Appeals dismissed


Summary:
The appellant is a manufacturer of Crude PVC films for the purpose of use in final products such as leather cloth and laminate jute mattings and PVC tapes both insulation and adhesive
The films manufactured by the appellant were subject matter of adjudication by the Excise authorities during the period commencing from 1st March 1970 to 29th May 1971
The Appellate Collector of Central Excise by an order dated 1411974 held that the appellant had produced sufficient evidence to prove that the said Crude PVC films were not marketable and were therefore not liable to excise duty
On 20111975 the appellant filed a classification list in respect of Crude PVC films used for lamination with jute and for tapes claiming that the said PVC films were non excisable on the ground that the same were non marketa ble intermediate products used exclusively for captive consumption
On 9121975 the classification list was ap proved by the Assistant Collector Central Excise
On 1521977 however the Assistant Collector issued a show 383 cause notice calling upon the appellant to show cause as to why the aforesaid films should not be re classified as excisable under Item No 15A2 of the Central Excise Tariff Schedule and appropriate duty not recovered under Rule 10 of the Central Excise Rules as these then stood read with Rule 173 J
By a corrigendum dated 2321977 to the said show cause notice Rule 10 A was substituted in place of Rule 10
The appellant contested the notice but the Assistant Collector vide his order dated 16th February 1978 confirmed the said show cause notice by holding that the said PVC films were classifiable under Item No 15A2 and directed the appellant to pay duty at the appropriate rate on past clearances under Rule 10 A read with Rule 173 J
The appeal filed against the aforesaid order was reject ed by the Appellate Collector of Central Excise on 10th October 1979
A revision was preferred before Customs Excise and Gold Control Appellate Tribunal
The Tribunal confirmed the order of the Appellate Collector and held that the goods in question fell under Tariff Item No 15A2 and were dutiable in the intermediate list and the question of marketability or being capable of being sold in the market was not relevant but modified the order to the extent that duty in respect of clearances prior to the issue of show cause notice was restricted to the period permissible in terms of Rule 10 read with Rule 173 J viz 12 months
In the statutory appeal to this Court under Section 35 L of the the question for consideration was whether the Crude PVC film was dutiable under Item No 15A2
Allowing the appeal HELD 1
In view of the Appellate Collector s order holding that the Crude PVC films were not marketable goods and there being no contrary evidence found by the Tribunal subsequent to the finding by the Appellate Collector no excise duty should be charged under Item No 15A2 of the Central Excise Tariff on the Crude PVC Sheets
The Tribunal went wrong in not applying the proper test
The test of marketability or capable of being marketed was not applied by the Tribunal
395D E 2
Under the Central Excise Act as it stood at the relevant time in order to be goods as specified in the entry the first condition was that as a result of manufac ture goods must come into existence
For articles to be goods these must be known in the market as such or these 384 must be capable of being sold in the market as goods
Actual sale in the market is not necessary user in the captive consumption is not determinative but articles must be capa ble of being sold in the market or known in the market as goods
Taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof
The manufacturer could not be taxed unless manufacturing process resulted in pro duction of goods as known in the market 
The expression goods manufactured or produced must refer to goods which are capable of being sold to the consumer
389B C 391F Union of India vs Delhi Cloth and General Mills 1963 Suppl
1 SCR 586 South Bihar Sugar Mills Ltd etc
vs Union of India  Ors   Union Carbide India Ltd vs Union of India  Governor General in Council vs Province of Madras 1945 7 FCR 179 In Re the Bill to Amend section 20 of the and Section 3 of the   applied
Simply because a certain article falls within the Schedule it would not be dutiable under excise law if the said article is not goods  known to the market
Marketabil ity therefore is an essential ingredient in order to be dutiable under the Schedule to the Central Tariff Act 1985
392F G 31
In the instant case the Crude PVC films as pro duced by the appellant were not known in the market and could not be sold in the market and were therefore not capable of being marketable
392G H