Case: Dharangadhra Chemical Works Ltd. and Ors Vs. Union of India (UOI) and Ors

1. Special leave granted in SLPs. 2. These appeals raise a common question of law and hence they are disposed of by this order. 3. The appellant-Company manufactures Trichloroethylene as the end product at its factory situate in Sahupuram (Tamil Nadu). In the process of manufacture of the said product Acetylene gas emerges. This Acetylene gas is in a crude form and is used by the assessee in the manufacture of the end product. The question is whether this Acetylene gas is liable to excise duty under Tariff Item 14H(vi). One of the contentions raised by the assessee was that this gas in the crude form was not marketable or capable of being marketed and, therefore, the assessee was not liable to pay excise duty thereon. The view taken is that since it is shown at Item (vi) at Entry 14H of the Central Excise Tariff no further inquiry is necessary and the same is liable to duty is excisable goods. The assessee had raised the contention that the said gas was not marketable in the crude form in which it was used for captive consumption and unless it was further treated by dissolving ice acetone and then being compressed it could not be taken to the market for sale. Unfortunately, this contention of the assessee was not examined by the Central Government as well as the CEGAT in these two cases. This Court has in a recent judgment in Moti Laminates Pvt. Ltd. and Ors. v. Collector of Central Excise, Ahmedabad 1995ECR1(SC) clearly held that goods although covered by a Tariff Item, unless marketable or capable of being marketed, are not exigible to excise duty. It was, therefore, essential for the authorities below to record a clear finding on the question whether the Acetylene gas in the form in which it emerges and is used for captive consumption is marketable or capable of being marketed. Since there is no positive finding on this issue, we are left with no alternative but to remit the matters to the CEGAT for recording a finding on the said issue. We may state that no other question was raised before us by the learned Counsel for the assessee nor will the Tribunal be required to go into any other question. The learned ASG appearing for the Revenue also fairly stated that he too did not see a definite finding on this issue recorded by the Central Government or the Tribunal.

Decision reasoning: 1[ds]Unfortunately, this contention of the assessee was not examined by the Central Government as well as the CEGAT in these two cases. This Court has in a recent judgment in Moti Laminates Pvt. Ltd. and Ors. v. Collector of Central Excise, Ahmedabad 1995ECR1(SC) clearly held that goods although covered by a Tariff Item, unless marketable or capable of being marketed, are not exigible to excise duty. It was, therefore, essential for the authorities below to record a clear finding on the question whether the Acetylene gas in the form in which it emerges and is used for captive consumption is marketable or capable of being marketed. Since there is no positive finding on this issue, we are left with no alternative but to remit the matters to the CEGAT for recording a finding on the said issue. We may state that no other question was raised before us by the learned Counsel for the assessee nor will the Tribunal be required to go into any other question.