U FOAM LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Writ Petitioner - a limited Company with its registered office situated at Hyderabad - has a Central Excise Licence to manufacture artificial of synthetic resins and plastic material, and articles thereof. The petitioner - Company holds L 4 No. 6/78 Central Excise Licence authorising it to manufacture goods covered by the Central Excise Tariff Item 15-A. Item 15-A mentions several products of which we are concerned with a product called by name Polyurethane Foam. Normally, the above the said product - which is one of the excisable goods within the meaning of Section 3 of the Central Excise Act - is produced or manufactured within the factory premises. The goods so manufactured are normally despatched as Polyurethane Foam. There is no dispute that the production of such Polyurethane Foam is subject to the excise-duty leviable by reason of Section 3 of the Central Excise Act read with Item 15-A of the First Schedule. But, the present controversy relates to the manufacturing activity of the petitioner-Company carried on outside its factory located at Hyderabad and in ships, docks and ports like Visakhapatam. The petitioner-Company for that purpose was licensed under Rule 174 of the Central Excise Rules authorising it to carry on an operation for the production or manufacture of the excisable goods. The petitioner-Company while adopting the process called one shot process, pumps the required raw-material into the cavities of the ship and manufactures a new product which is admittedly called Polyurethane Foam.

(2.) Now, the question is, whether Polyurethane Foam so produced in the ship by the above mentioned method of one shot process is liable to be visited which excise-duty ?

(3.) The contention of the petitioner is not that what is produced by the above method is not polyurethane Foam. On the other hand, the learned counsel for the petitioner has repeatedly admitted before us to the several questions put to him that the above said process produced polyurethane foam. But, his contention is that polyurethane foam to produced is not a result of a manufacturing process, and a product so produced is not marketable and should, therefore, be regarded as not being an excisable goods within the meaning of section 3 of the Central Excise Act. Section 3 of the Central Excise Act authorities levy and collections of duties of excise on all excisable goods which are produced or manufactured in India.