LexCOMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I versus M/S. MARKFED VANASPATI AND ALLIED INDUSTRIES
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A COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I V. MIS. MARKFED VANASPATI AND ALLIED INDUSTRIES APRIL 9, 2003 B [S.N. VARIA VA AND H.K. SEMA, JJ.] Excise Tari.fl Act, 1985; Tari.fl Item 1507: Classification-Spent earth-Levy of excise duty-Tests of manufacture C and marketability-Significance of-Held: goods though covered by tariff entry may not be excisable unless it satisfies the tests of 'manufacture and marketability '-The product ''<;:ent earth" remains 'earth' even after undergoing processing-Burden to prove is on Revenue-Revenue failed to produce evidence of marketability and manufacture-Since excise duty on the D product 'earth' levied and paid by assessee, levy of excise duty on 'spent earth' would amount to double levy on the same product. Words and Phrases: Marketability and Manufacture '-Meaning of in the context of excise E laws. F G H The questions which arose in these appeals were whether "spent earth" is excisable merely because it falls within a tariff entry and whether the well settled tests of 'manufacture and marketability' cease to apply if goods falls within tariff entry. It was contended for the Revenue that since goods 'spent earth' falls within one of the tariff items, it becomes excisable. Answering both the questions in the negative, the Court HELD: I.I. Prior to the entry of 'spent earth' as tariff item in the Excise Tariff Act, it had been consistently held that the product "spent earth" was not manufactured; that "spent earth" remained "earth" even after undergoing processing; that its absorption capacity was reduced; that duty having been paid on "earth", no duty was leviable on "spent earth" 480 -- COMMIR. OF CENTRAL EXCISE 1•. MARKFED VANASPATI AND ALLIED INDUS. 48 J as it remained the same product; and that levying of duty on "spent earth" A would amount to double levy. Hence the product "spent earth" was not excisable. (482-F-GI 1.2. A larger Bench of the apex Court in the case of *Collector of Central Excise, Indore v. Universal Cable Ltd., (1995) Supp. 2 SCC 465 held that a good does not become excisable because it is covered by Tariff entry. Subsequently in the case of **Mis. Cadila Laboratories Pvt. Ltd. v. CCE, Vadodara in C. A. No. 6745 of 1999 decided on 13.2.2003 this Court held that merely because an item falls in a Tariff Entry, it does not become excisable unless there is manufacture and the good is marketable. Thus, B it is not possible to accept the contention that merely because an item falls C in a Tariff Entry it must be deemed that there is manufacture. The law still remains that the Revenue must prove that there is manufacture. In the instant case no new evidence is placed to show that there is manufacture. The product 'spent earth' remains earth even after the processing. Since excise duty was already levied on earth and paid by the assessee, any levy of excise duty on spent earth thereon would amount to D levying double duty on the same product. 1483-E-F, G, H; 484-AI *Collector of Central Excise, Indore v. Universal Cable Ltd., (19951 Supp. 2 SCC 465, followed. B.P.L. Pharmaceuticals Ltd. v. Collector of Central Excise, (19951 Supp. E 3 SCC I, relied on. Lal Woollen & Silk Mills (P) Ltd., Amritsar v. Collector of Central Excise, Chandigarh, (19991 4 SCC 466, distinguished. F **Mis. Cadila Laboratories Pvt. Ltd. v. CCE, Vadodara,(20031 4 SCC 12, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 77-80 of2001. From the Judgment and Order dated 12.11.1999 of the Customs Excise, G and Gold (Control) Appellate Tribunal, New Del.hi in A. No. E/32, 299/90- C, 3134/91-C, 309/92-C in F. 0. Nos. E/102-105 of 1999. WITH C.A. Nos. 7668, 1074 of 2001. H 482 SUPREME COURT REPORTS [2003) 3 S.C.R. A Raju Ramachandran, Additional Solicitor General, Hemant Sharma, Sanjiv Sen and B. Krishna Prasad for the Appellant. Rajesh Mehale for the Respondents. The Judgment of the Court was delivered by B V ARIA VA, J. These appeals are against the judgment of the larger bench of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGA T). The question for consideration is whether "spent earth" is liable to excise duty or not. Under the Tariff, prior to its amendment in 1985, it had been consistently held that "spent earth" was not liable to duty. However, C with the enforcement of new Tariff in 1985, a conflict arose between various benches of the Tribunal. Some benches held that "spent earth
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