(2.)IN these appeals, the short question that arises for consideration is: whether plastic body, a part of Electro Mosquito Repellant, and 'Fragrant Mat' are chargeable to excise duty under Clause 5(f) of Notification 160/86-CE dated 1/03/1986 and Sub-Heading 3307.49, respectively, of the Central Excise Tariff Act, 1985.
Show cause notices were issued to the appellants under Section 11-A of the Central Excise Act, 1944 (for short, 'the Excise Act') by the Superintendent, Central Excise Range II, Pithampur, raising demand of excise duty on plastic body of Electro Mosquito Repellant (for short, 'E.M.R.') [which falls within 'Domestic electrical appliances] classifiable under Sub-Heading 85.16 of the Central Excise Tariff Act, 1985 (for short, 'the Tariff Act') and on Fragrant Mat. The respondents in Civil Appeal Nos. 182 of 1995 and 108 of 1995 filed writ petitions, under Article 226 of the Constitution, before the High Court of Madhya Pradesh challenging the validity of the show cause notices. However, the respondent in Civil Appeal No.1649 of 1996 filed reply before the concerned authorities. The Collector of Customs and Central Excise, Indore, confirmed the demand which was assailed before Customs, Excise and Gold (Control) Appellate Tribunal in appeal. The High Court, in writ petitions, held that the 'plastic body' is not 'goods within the meaning of the Tariff Act and, therefore, it is not liable to excise duty and that the Fragrant Mat, did not answer the description of Sub-Heading 3307.49 and, therefore, it quashed the show cause notices. Against the judgment and order of the High Court dated 24/03/1994, allowing in the writ petitions, the aforesaid two appeals, being Civil Appeal Nos. 182 of 1995 and 108 of 1995, are filed before the Revenue. Civil Appeal No. 1649 of 1996 arose from the order of the Customs, Excise and Gold (Control) Appellate Tribunal dated 6/04/1995, allowing the appeal in the light of the said judgment of the High Court of Madhya Pradesh.
Mr. Mukul Rohtagi, learned Additional Solicitor General, argues that, so far as the plastic body is concerned, it is a finished product; it cannot be termed as an intermediate product and the fact that it is not being bought and sold in the market, will not militate against the marketability of the goods, therefore, it is liable to excise duty under clause 5(f) of Notification No. 160/86-CE. In support of his contention, he relies upon the judgment of this Court in A.P. State Electricity Board v. Collector of Central Excise, Hyderabad [1994 (2) SCC 428].
(3.)MR. A.R. Madhava Rao, learned counsel appearing for the respondent-assessees, submits that the plastic body is manufactured to cater to the requirements of the respondents' EMR. The plastic body is not a standardised item and is not known by any name in the market and as such the High Court has rightly found that it is not marketable.
It is a common ground that EMR is exempt under clause 5(d) of Notification No.160/1986-CE dated 1/03/1986. The case of the Revenue is that under clause 5(f) of the said Notification, the plastic body, a part of EMR, is liable to excise duty.