COMMISSIONER OF CENTRAL EXCISE Vs. MIL INDUSTRIES LTD.

JUDGEMENT

(1.) The issue involved in this appeal of the Revenue is whether the vulcanized rubber sheets in the form of linings bonded, in autoclave in the respondents' factory, to metallic surface of equipments supplied by customer, during the period of dispute, are excisable or not? This question requires to be decided upon by careful consideration of the activity undertaken by the respondents. The activity has been lucidly stated in the impugned order of the Commissioner, which is reproduced below : -

(2.) The above factual findings are not under challenge in this appeal. What is contended by the appellant is that, even though the vulcanized rubber lining was formed in autoclave and was bonded strongly to the metal surface of the equipment, still it was capable of being marketed as such. The appellant says that the vulcanized rubber sheet lining can easily be removed from the metal surface. But how? There is no answer in the appeal. The Commissioner's order has clearly recorded that the rubber lining was strongly bonded to, and inseparable from, the metal surface as a result of the vulcanization process. This finding has not been challenged. Therefore, the plea that the vulcanized rubber sheet lining could easily be removed from metal surface is rejected straightaway. If the vulcanized rubber sheet lining is inseparable from the equipment, it is hardly marketable. The appeal also does not state as to how the goods in question could be marketed. The appellant is seen to have relied on a decision of the Andhra Pradesh High Court in U. Foam v. Union of India, 1987 (27) E.L.T. 262 (A.P.). On the other hand, ld. Counsel representing the respondents has relied on the decision of the Tribunal in Milton Trading Corporation v. CCE, 1992 (60) E.L.T. 619 (T), which has, reportedly, been affirmed by the Supreme Court vide 2000 (116) E.L.T. A68.

(3.) We have found that the finding of non -marketability of the item recorded by the adjudicating authority, has not been rebutted. Further, the Tribunal's decision in Milton Trading Corporation v. CCE (supra), which was relied on by the lower authority, can be squarely applied to the facts of this case. In that case, the question was excisability of polyurethane foam formed by interaction between polyols and isocyanates within the cavity of articles like water jug, etc. Polyurethane foam was formed in situ. The Tribunal held that the in situ process did not amount to "manufacture" within the meaning of Section 2(f) of the Central Excise Act. The decision of the Tribunal has been affirmed inasmuch as the Civil Appeal filed against it was dismissed by the Supreme Court vide 2000 (116) E.L.T. A68. The ratio of the decision in Milton Trading Corporation is squarely applicable to the instant case involving the in situ process of providing vulcanized rubber sheet lining to metallic surface of equipments. Following the said ratio, we affirm the decision of the adjudicating authority. Though ld. SDR has submitted that the Andhra Pradesh High Court's decision is applicable to the facts of this case, she has not substantiated the point. The case considered by the Andhra Pradesh High Court has not been shown to involve any in situ process.