A.P. STATE ELECTRICITY BOARD versus COLLECTOR OF CENTRAL EXCISE, HYDERABAD

Citation: [1994] 1 S.C.R. 499 · Decided: 01-02-1994 · Supreme Court of India · Bench: B.P. JEEVAN REDDY, B.L. HANSARIA · Disposal: Dismissed
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Judgment (excerpt)

A.P. STATE ELECTRICITY BOARD 
v. 
COLLECTOR OF CENTRAL EXCISE, HYDERABAD 
FEBRUARY 1, 1994 
[B.P. JEEVAN REDDY AND B.L. HANSARIA, JJ.] 
Central Excises and Salt Act, 1944: Sections 2(d), :J-'Excisable 
Goods'-Manufacture of-'Marketability'-Concept of. 
A 
B 
The appellant-Electricity Board required prestressed cement con-
C 
crete poles for distribution of electricity generated by it. The manufacture 
of the poles was done by the Contractors under direct supervision of the 
Board which supplied requisite material like cement, concrete, steel etc. to 
the Contractors. The Revenue sought to levy excise duty on the poles 
manufactured by the appellant, treating.. the same as 'goods' as envisaged 
by Section 3 of the Central Excises and Salt Act, 1944. It was resisted by D 
the appellant. The matter ultimately went before the Customs, Excise and 
Gold (Control) Appellate Tribunal. The Tribunal decided in favour of the 
Revenue. 
In appeal to this Court, it was contended on behalf of the appellant-
E 
State Electricity Board that the poles manufactured by it were utilized for 
its own purpose and were not sold in the market; the poles had no market, 
are not known to the market, and that they were not 'marketable' it was 
contended. It was argued that for the said re&1sons, they were not goods as 
contemplated by Section 3 and Section 2( d) of the Central Excises and Salt 
Act, 1944. 
F 
Dismissing the appeal, this Court 
HELD: 1.1. The 'marketability' is essentially a question of fact to be 
decided in the facts of each case. There can be no generalisation. The fact 
that the goods are not in fact marketed is of no relevance. So long as the G 
goods are marketable, they are goods for the purpose of Section 3 of the 
Central Excises and Salt Act, 1944. It is also not necessary that the goods 
should be generally available in the market. Even if the goods are available 
from only one source or from a specific market, it makes no difference so 
long as they are available for purchasers. Even if there is only one pur- H 
499 
500 
SUPREME COURT REPORTS 
(1994} 1 S.C.R. 
A 
chaser of the goods it must still be said that there is a market for the same. 
The marketability of goods does not depend upon the number of pur-
chasers nor is the market confined to the territorial limits of this country. 
(506-G-H; 507-A) 
1.2. The appellant's own case before the excise authorities and the 
B 
C.E.G.A.T. - though not pressed before this Court - that the poles were 
manufactured by the independent contractors from whom it purchased 
them, besides, the fact that in the State of Kerala the poles are manufac-
tured by independent contractors who sell them to Kerala Electricity 
Board, shows that such poles do have a market. (507-B-C] 
C 
Collector of Central Excise v. Kera/a State Electricity Board, Civil 
Appeal No. 140of1989 disposed of on March 12, 1990, relied on. 
Union of India v. Delhi Cloth & General Mills, (1963) Suppl. 1 S.C.R. 
586; South Bihar Sugar Mills Ltd. v. Union of India, [1968) 3 S.C.R. 21; 
D Union Carbide India Ltd. v. Union of India, (1986) 2 S.C.R. 162; .Bhor 
Industries Ltd., Bombay v. Collector of Central Excise, Bombay, (1989) 1 
S.C.R. 382 and Collector of Central Excise v. Ambala Sarabhai Enterprises, 
(1989) 3 S.C.R. 784, distinguished. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4030-45 
E 
of 1991. 
From the Judgment and Order dated 3.1.1991 of the Customs, Excise 
and Gold (Control), Appellate Tribunal, New Delhi in A.Nos. 
ED/SB/396/83-A, ED/SB/95/84-A, ED/SB/96/84-A, E/686/85-A, E/483/86-
A, ED/SB/497/84-A, E/245/87-A, E/C0/134/87-A, 246/87-A with 
F 
E/C0/138/87-A & E/Misc/1028/90-A, E/482/86-A & E/Misc/1029/90-A, 
E/470/86-A with E/Misc/1039/90-A, E/273/87-A & E/C0/136/87-A, 
E/Misc/1036/90-A, E/274/87-A, E/C0/139/87-A, E/Misc/1033/90-A, 
E/284/87-A, E/C0/137/87-A, E/Misc/1026/90-A, E/352/88-A & 
E/Misc/1035/90-A, E/279/87-A & E/C0/135/87-A, E/Misc/1035/90-A, 
E/687/85-A & E/Misc/1027/90-A and Order No. 64 to 79/91-A and Misc. 
G Orders Nos. 33 to 45 of 1991-A. 
WITH 
C.A. Nos. 791, 4440/88 and 4563-4581 of 1984. 
H 
Shanti Bhushan, K. Rajendra Chowdhary, Rakesh K. Sharma and· 
-
AP.S.E.B. v. C.C.E. [JEEV AN REDDY, J.) 
501 
Ashok Grover for the Appellants. 
A 
Joseph Vellapallai and Ashok K. Srivastava for the Respondents. 
The Judgment of the Court was delivered by 
B.P. JEEVAN REDDY, J. 1. The question raised in this batch of B 
appeals is whether the prestressed cement concrete poles manufactur
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