Order

The question in this appeal is whether the intermediate chemicals which are formed in the process of manufacture of Butachlor are liable to tax under the Central Excise and Salt Act, 1944 (referred to as the Act). The two chemicals in question are Diethyl Chloro Acetanilide (DECA) and Chloro Mehtyl Butyl Ether (CMBE).

2. The period in question is 1989 to 1991. During this period of time, Butachlor was exempted from payment of excise duty. However, a demand was raised by the Assistant Collector (Excise) on the appellant in respect of the intermediate products because they were “coming into exist­ence”. The demand, however, was set aside by the Commissioner (Ap­peals) who was of the view that the Assistant Collector had not come to any finding whether the products in question could be treated as marketable. It was held that there was no factual basis whatsoever on the basis of which the Assistant Collector could have reached the conclusion that the products were marketable and unless the goods were marketa­ble, they were not subject to excise duty. It was, therefore, held that reading Section 2(F) with Section 3 of the Act, the products in question were not marketable only becaus