D.C. Mandal, Member (T)

1. The point for decision in this appeal is whether Calcium Carbide manufactured by the appellants and used by them in the manufacture of acetylene black is liable to Central Excise duty under Item 14AA of the Central Excise Tariff.

2. The process of manufacture of calcium carbide by the appellants as described by the Assistant Collector of Customs Central Excise in the order-in-original is as follows :

"The raw material for the manufacture of Calcium Carbide is lime stone. The lime stone is first crushed into required size and burnt in oil furnace to get calcinated lime. This calcinated lime is added to required quantity of charcoal and fed to electric furnace where it is burnt at a temperature ranging from 2200° C to 2500° C. Then a liquid is obtained which is tapped from the furnance into trays which are mounted on wheels. The molten liquid is allowed to be air-cooled. The material obtained is Calcium Carbide in boulder (lump) form. This is taken to iron platform where it is hammered to pieces and it is conveyed to machines where it is sieved to different sizes. This sieved Calcium Carbide (CaC2) is packed into air tight drums for marketing and some quantity, after sieving in loose form is carried to their Acetylene Black plant in tankers of about 3 to 4 tonnes capacity, mounted on trailers, as and when required for the manufacture of Acetylene black."

3. The only raw material utilised in the manufacture of Acetylene black is CaC2 in naked form. After sieving the Calcium Carbide, no other process takes place, and it is either packed in air-tight drums or sent to their acetylene black plant. Therefore, after Calcium Carbide has been sieved into different sizes, no further manufacturing process takes place, except packing that quantity which is meant for sale and consequently it follows that the manufacture has been completed and Calcium Carbide falling under Tariff Item 14AA, which is specific for Calcium Carbide, has emerged. The Assistant Collector of Central Excise has held that the Calcium Carbide used by the present appellants captively in the manufacture of Acetylene black falls under Central Excise Tariff Item 14AA. In the impugned order, the Collector (Appeals) has confirmed the decision of the Assistant Collector. The Collector (Appeals) has observed that the Tariff Item 14AA does not prescribe any standard of purity, nor does it lay down that Calcium Carbide to be excisable, must be packed in air-tight drums. Taxable event in Central Excise is manufacture and not marketability. In the absence of any stipulation in the Tariff regarding marketability of a product, it is not open to read such a condition in the Tariff. He has also observed that the judgment of Delhi High Court in the case of Delhi Cloth Mills, on which the appellants placed reliance, was influenced by the provisions of Rules 9 and 49 of the Central Excise Rules as they existed at the time of delivering the judgment, but after the amendment of these two Rules this judgment would not be relevant.

4. We have heard Shri Haksar for the appellants and Shri Sunder Rajan for the respondent. Shri Haksar has argued that the Calcium Carbide which is captively consumed for the manufacture of Acetylene black is not "goods" as it is not marketable without being packed. Unless the Calcium Carbide is packed in air-tight drums in accordance with the provisions of Carbide of Calcium Rules, 1937, it does not become marketable and unless the product is marketable it is not "goods" for the purpose of Central Excise duty. In support of this argument, Shri Haksar has relied on the Supreme Court judgment in the case of Union Carbide of India Ltd. v. Union of India and Ors., decided on 4.4.86 and reported in MANU/SC/0306/1986 : 1986 (24) ELT 169 (SC). He has stated that after this judgment of the Supreme Court, this Tribunal's decision reported in MANU/CE/0082/1985 : 1985 (21) ELT 532 (Tribunal) in the case of Ilac Limited, Bombay v. Collector of Cen