Commissioner of Customs and Vs. Parshuram Pottery Works Co. Ltd. - Court Judgment

Excerpt:

.....two appeals is a manufacturer of bricks, blocks and tiles. notice issued to it demanded duty on the unfired bricks that is stated to have been manufactured by it. the asst. commissioner confirmed the proposal in the notice. on appeal from this order the commissioner (appeals) concluded that the unfired bricks were of no use to anyone and were not marketable. he accordingly set aside the demand for duty. hence this appeal by the department.2. it is difficult for us to accept the contention of the manufacturer that the goods had no market, and that it only sold these unfired bricks at throw away prices because its kiln was unusable, the show cause notice which we are concerned with in appeal 3666 relates to a period from april to june 1996. notice in the other appeal 3667 relates to the period from october to november 1996. the departmental representative tells us that one more appeal is pending. it is thus clear that there has been a clear continuing pattern of sale of these goods. in the situation, it is not possible for us to say that the goods were not marketable.3. it is however, not clear to us whether the unfired goods are the result of manufacture. from the process of.....

Judgment:

1. Parshuram Pottery Works Co. Ltd., the respondent to these two appeals is a manufacturer of bricks, blocks and tiles. Notice issued to it demanded duty on the unfired bricks that is stated to have been manufactured by it. The Asst. Commissioner confirmed the proposal in the notice. On appeal from this order the Commissioner (Appeals) concluded that the unfired bricks were of no use to anyone and were not marketable. He accordingly set aside the demand for duty. Hence this appeal by the department.

2. It is difficult for us to accept the contention of the manufacturer that the goods had no market, and that it only sold these unfired bricks at throw away prices because its kiln was unusable, The show cause notice which we are concerned with in appeal 3666 relates to a period from April to June 1996. Notice in the other appeal 3667 relates to the period from October to November 1996. The departmental representative tells us that one more appeal is pending. It is thus clear that there has been a clear continuing pattern of sale of these goods. In the situation, it is not possible for us to say that the goods were not marketable.

3. It is however, not clear to us whether the unfired goods are the result of manufacture. From the process of manufacture that has been furnished, it appears that the respondent made these unfired bricks by mixing fire clay, ground bricks and ground calcite oxide and water.

Whether by these activities there has been manufacture as defined in Section 2A of the Act; whether, that is to say, by such mixture and shaping into blocks there emerges a new commodity with a name character and use different from the raw material is not clear. The matter requires to be considered in detail.

4. Accordingly, we allow these appeals and set aside the impugned order. The Asst. Commissioner shall consider the materials the respondent may produce bearing in mind that it is upon the department to demonstrate that manufacture has taken place, come to a decision on the subject in accordance with law and if necessary, determine the classification of the goods for their lability to duty. Either side is at liberty to adduce evidence in support of its claim.