Judgment

B.P. JEEVAN REDDY, J.- The question raised in this batch of appeals is whether the prestressed cement concrete poles manufactured by the appellant, Andhra Pradesh State Electricity Board, are goods within the meaning of Section 3 of the Central Excises and Salt Act, 1944. Section 3 levies duties of excise "on all excisable goods ... which are produced or manufactured in India". The expression excisable goods is defined in clause (d) of Section 2. At the relevant time, the definition ran thus - "excisable goods means goods specified in the Schedule to this Act as being subject to a duty of excise and includes salt". The expression goods is not defined. According to the learned counsel for the appellant, goods contemplated by Section 3 and Section 2(d) are those goods which are marketable and inasmuch as the poles manufactured by the appellant are not marketable, they are not goods. It is the correctness of the said submission which we have to examine.

2. The appellant-Electricity Board requires poles of different sizes, strength and dimensions for distributing electricity generated by it. The manufacture of these poles is actually done by the contractors under the direct supervision of the Board. It is the Board which supplies the requisite material like cement, concrete and steel. In fact, one of the main contentions raised by the appellant before the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT), besides the one urged in these appeals, was that the manufacture of the said poles is undertaken by independent contractors and that the Board merely purchased the same from them. On this basis, it was contended that the duties of excise must be levied upon the contractors and not upon the appellant-Board. This plea is, however, not urged by the appellants counsel before us. The only contention of Shri Shanti Bhushan, learned counsel for the appellant is this : The poles manufactured by the appellant are of various sizes, strength and dimensions. There are about 100 types of poles. All the poles manufactured by the Board are utilised for its own purposes. They are not sold in the market. In fact, they have no market and are not known to the market. The excise authorities have not pointed out any instance where these poles were sold by the Board. They are, therefore, not marketable and hence, not goods within the meaning of and for the purposes of Central Excise Act.

3. Shri Joseph Vellapally, learned counsel for the Revenue, on the other hand, submitted that the very plea taken by the appellant at an earlier stage that these poles were manufactured by the independent contractors from whom the appellant-Board purchased them itself shows that these goods are marketable. Learned counsel relied upon an order of this Court in CCE v. Kerala State Electricity Board{Civil Appeal No. 140 of 1989, decided on March 12, 1990} wherein this Court accepted the finding recorded by the CEGAT that the manufacture of poles in that case was done by independent contractors from whom the Kerala State Electricity Board purchased them. Counsel pointed out that just as the appellant-Board requires poles of different sizes, strength and dimensions, so does Kerala Board. The fact that Kerala Board purchases these poles from contractors clearly establishes the marketability of these poles. The fact that the appellant does not sell these poles does not affect the marketability of the said goods. The counsel also pointed out that besides Electricity Boards, there are other establishments engaged in the manufacture of electricity like Tatas in Bombay. They too require poles of different sizes which may either be manufactured by them or purchased from independent contractors.

4. Since the requirement of marketability has been evolved by a process of judicial interpretation, it would be appropriate to notice the relevant decisions, upon which strong reliance is placed by Shri Shanti Bhushan.

5. The first decision is in Union of India v. Delhi Cl