Per D.N. Panda:
Ld. DR Shri Vijai Kumar submits that when the goods were sold by 100% EOU in domestic area charging provision under Section 3 of Central Excise Act 1944 is to be read in terms of proviso appearing in sub-clause (ii) of sub-section (1) of Section (3) for levy of duty on such goods. According to him if any rate of duty under excise law is not prescribed on such goods, the duty payable shall be equal to aggregate of the duties of Custom which would be leviable on goods produced or manufactured outside India if imported into India. In view of such mandate of the statute, not only the duty becomes payable according to the Tariff Entry of Customs law but also according to the provisions contained in any other law for the time being in force. He also submits that even if the goods are not appearing in Central Excise Tariff Act, 1985, those goods are liable to excise duty since manufactured in India. Therefore, ld. Appellate Authority has made an error in law to allow the Appeal of the Respondent by order dated 7.10.05.
2. Ld. Counsel Shri Bipin Garg appearing on behalf of Respondent supports the order of the ld. Appellate Authority on the ground that when the goods are not liable to excise duty by specific provision of law, that shall not be made liable by any imagination.
3. Heard both sides and perused the record.
4. Ld. Adjudicating Authority imposed Central Excise duty of Rs.72,868/- holding that the goods manufactured by the Appellant having been sold in DTA was liable to 30% duty. But considering the provision of law, ld. Commissioner (Appeals) has granted relief.
5. We have examined the interpretation of statute in this case as to the charge of duty. Section 3 of the Central Excise Act 1944 prescribes the incidence of duty in respect of the goods manufactured and that too, manufactured in India and such manufactured goods being marketable and finding place in the tariff list under Central Excise Tariff Act, 1985 for levy. Courts have tested excisability of goods by two important criteria. Those are manufacture and marketability. While holding so, courts have also held that mere appearance of the goods manufactured in the Tariff list shall not ipso facto liable to excise duty if that fails to meet the test of marketability. Therefore looking to various aspects, we have tried to find out what is called excisable goods appearing under the proviso to Section 3(1) of Central Excise Act, 1944. The meaning of the term has been provided by Section 2 (d) of the Central Excise Act, 1944. In absence of any other meaning under Section 3, the meaning of Section 2(d) is only to be imported to Section 3 for construction. According to Section 2(d), the terms excisable goods has been defined to mean goods specified in the First Schedule and Second Schedule to the Central Excise Tariff Act, 1985. Once such a definition is imported to the proviso to Section 3(1), in absence of anything contrary, Revenue’s appeal fails. The goods in question not being finding place in Tariff Act, 1985 and nothing being brought to any of the entries therein, the order passed by the ld. Appellate Authority is to be upheld. Once the goods is not excisable, there is no question of any leviability taking shelter of Section 3(1)(ii) of the Central Excise Act, 1944. Accordingly, Revenue’s appeal is dismissed.