Customs, Excise and Gold Tribunal - Mumbai
Nilmac Packaging Industries Ltd. vs Commr. Of C. Ex., Mumbai-Iii on 25 February, 2002
Equivalent citations: 2002(82)ECC112, 2002ECR192(TRI.-MUMBAI), 2002(141)ELT781(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The appellant is a manufacturer inter alia of bodies of marker pens which it sells to Camlin India Ltd., a manufacturer of such pens. The process starts with the aluminium slugs, which extruded into cylindrical shape closed at one end with an open end with uneven and jointed rim at the order. This extruded product is subject to the process of cutting of the rough edges, necking of the open end and putting a thread on it, coating the interior of the tube and printing the relevant material relating to the pen on the outer surface. The question for consideration in this appeal is the liability to duty of the extruded product. In the order impugned in this appeal, the Commissioner (Appeals) has held this product to be aluminium cans classifiable under Heading 7612.91 of the tariff.
2. The contention of the appellant throughout has been that this product is not marketable. It has no use for anyone except Camlin India Ltd. no buyer or any other use. The Assistant Commissioner and Commissioner (Appeals) has both said that for an article to be considered as marketable, it is not necessary that it must be shown to have been marketed. It is sufficient to show that it is capable of being bought and sold. The Additional Commissioner has also said that captive consumption amounts to sale.
3. While the Departmental Representative reiterates this, we do not think that these authorities have satisfied the criteria of marketability. The basis for this contention is the product, which resembles an aluminium can, can be used for storage of goods and is so saleable. The Supreme Court in Union Carbide India Ltd. v. U.O.I. - 1986 (24) E.L.T. 169 was concerned with product which was not dissimilar to the goods now under consideration, goods described as aluminium cans which resulted in the course of manufacture of torchlight. The Court noted that "the aluminium cans at the point at which excise duty has been levied, exist in a crude and elementary form incapable of being employed at that stage as a component in a flashlight. The cans have sharp uneven edges and they have to undergo various processes such as trimming, threading and redrawing." In the case before us, the authorities have considered the articles to be containers and not component parts of marker pen. It requires of the department to establish in order to satisfy the criteria of marketability that the goods are capable of being sold even if actual sale need not be established, That capability has however to be demonstrated and cannot be merely raised on assumption. The Counsel for the appellant undertakes on behalf of the appellant that an affidavit will be filed before the Additional Commissioner stating that the goods are not capable of being either components of marker pen or cans for containing any other goods. If this is done, we think that it would fall upon the department to establish by means of evidence and not by mere assertion that these goods are capable or being used either as cans or as components.
4. The Additional Commissioner should also consider the appellant's alternative plea raised before him that if the goods are found to be components as marker pens, they are entitled to exemption they would be classifiable under Heading 96.08 (exemption contained in Notification 83/90).
5. The appeal is accordingly allowed. The order of the Commissioner (Appeals) set aside. The Assistant Commissioner shall, after receiving the affidavit, deal with it and the alternative plea, in accordance with law.