CIPLA LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE, BANGALORE

JUDGEMENT

(1.) THE appellants filed classification list with effect from 5 -6 -86 and 1 -3 -87 in which they declared that one of the items viz Benzyl Methyl Salicylate (for short BMS) was prepared in their factory and the same was non -excisable. They were issued with two show cause notices both dated 28 -8 -87, wherein it was proposed that BMS was an item liable to duty and the same is classifiable under sub -heading 2913.00 of the Central Excise Tariff Act, 1985, prior to 9 -2 -87 and under sub -heading 2942.00 after 9 -2 -87. They submitted that BMS was not an excisable commodity, since the same is not sold by them nor the same has been purchased by any other party. It was submitted that the show cause notice did not give any ground based on which the proposal was made to levy duty on BMS. They submitted that in order to levy duty under Central Excise Act, the department must show that the item is goods, which is known to the trade which deals in the item. The item must be capable of being bought and sold in the market and as the BMS cannot be bought and sold in the market, it cannot be treated as marketable and therefore, it cannot be treated as goods liable to Central Excise duty.

(2.) THE Assistant Collector confirmed the duty liability in terms of Rule 2(a) of Interpretative Rules and approved the Classification Lists. Aggrieved by this, the appellant took Writ Proceedings to the Honble High Court of Karnataka and filed the remand orders. In remand the Assistant Collector found and held : -

(3.) REVENUE took up this decision of non -exisability of the Assistant Collector to Collector (Appeals) by way of Review. The appellants again took up the matter in Writ to Karnataka High Court, which was disposed of by directing the appellants to appear before Collector (Appeals). The Commissioner (Appeals) found : -