Per Smt. Archana Wadhwa :

Heard both sides.

2. Being aggrieved with the order passed by the Commissioner (Appeals), revenue has preferred the instant appeal.

3. The first point required to be decided is as to whether the melted iron obtained by the respondent at a very high temperature of 1300oC can be said to be an excisable and dutiable product. The respondents stand before the authorities was that the said melted iron has to be maintained at the level of high temperature at which it is obtained and has to be kept in the melted form for the purposes of further use and as such the same is not marketable. This stand of the appellant has been accepted by the first appellate authority, by observing that the department has not been able to produce on record any evidence to show that the melted iron so obtained by the respondents at the intermediate stage is going to the market for being bought and sold. Relying upon the decision of the Supreme Court in the case of Bhor Industries reported in 1989 (40) ELT 280 (SC) he has held that the same cannot be subject to levy of duty. The revenue in their grounds of appeal have referred to several judgements of the Supreme Court as also of the Tribunal in support of their plea that it is the 'marketability' of the product which is relevant and deciding factor and not the actual marketing of the product by the manufacturer. However, the department has not been able to show or put any evidence on record in support of their stand that the melted iron is a marketable commodity, even though not actually marketed by the respondents. The ratio of the decisions relied upon by the department is to be applied to the facts of the case. We also observe that the onus to prove marketability is on the department. In the absence of any evidence produced by the department, we find that the Collector (Appeals) has rightly held that melted iron obtained at a high temperature and maintained at that level cannot be said to be marketable and hence excisable. Accordingly we do not find any merits in this part of the appeal filed by the revenue and sustain the said portion of the Collector (Appeals) order.

4. The next question required to be decided is as to whether the pig iron and forging of non-alloyed steel used by the respondents captively in the manufacture of machinery parts which are further used by them for repairing and maintenance of machinery installed in their factory will get the benefit of Exemption Notification No. 281/86-CE. We have heard Shri R.K. Roy, Ld. JDR and Shri N. Mukherjee, Ld. Advocate on the said issue. Notification No. 281 of 86 grants exemption to all excisable goods manufactured in the workshop within the factory and intended for use in the said factory or in any other factory of the same manufacturer, for repairs or maintenance of machinery installed, from the whole of duty of excise leviable thereon. The respondent's stand is that since the pig iron as well as the forgings manufactured out of the said pig iron had been used in the manufacture of machinery parts which have been further used for repair and maintenance of their installed machinery, the same would get the benefit of Notification No. 281 of 86 in as much as the pig iron can be said to have been ultimately used in the repair and maintenance of the machinery installed in their factory. In support of his contention Shri Mukherjee has relied upon the Tribunal's decision in the case of TISCO Vs. Collector of Central Excise reported in 1990 (46) ELT page 409, wherein the benefit has been given to the forgings used in the manufacture of machinery parts further used in the repair and maintenance of the machinery installed in the factory. He submits that in view of the above decision, the Collector (Appeals) has rightly held that the benefit of Notification No. 281 of 86 would be available to the pig iron also. On the other hand Shri Roy has taken us through the grounds of appeal and argued that the respondent have manufacture