Case Law Details
The Supreme Court last week dismissed the appeal of Usha Rectifier Corporation challenging the levy of central excise on products which were used for research and development. The company manufactures electronic equipment. It bought components and assembled them for R & D. The company argued that there was no manufacture of any product which was marketable and therefore it was not liable to pay excise duty. It further contended that the equipment were used within the factory and it was not taken out of factory gates. The item was dismantled within the factory itself. Rejecting the argument, the Supreme Court ruled that “even if the equipment were used for captive consumption and within factory premises, considering that they were salable and marketable, duty was payable on the goods.” Apart from capitalization of the manufacturing process in the balance sheet, the company’s assertion that the equipment was meant to save foreign exchange by developing indigenous products, was an admission that the goods were marketable. Such products would be “deemed to have been removed from the factory premises for consumption,” the judgment said.
Supreme Court
M/s. Usha Rectifier Corpn. (I) Ltd. [Presently known as M/s. Usha (I) Ltd.] Vs. Commissioner of Central Excise, New Delhi
Dr. MUKUNDAKAM SHARMA, J. Please become a Premium member. If you are already a Premium member, login here to access the full content.
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