Cancellation of Central Excise Registration - Audit Mandatory?

It is very clear in excise that for levy of duty there should be excisable goods which should be covered by twin test of 1. manufacture and 2. marketable. This changed definition intends to cover the goods which can be sold. i.e. marketability is sought to be established. However, department intends to collect duty on all the excisable goods including even those products (byproducts/scraps) which are not passing second test of "manufacture". This is legally established by various SC orders as goods not being "manufactured" are not subjected to duty.

What is being ignored, may be intentionally, is that the amendment has covered only one aspect of "marketability and not the second one of "manufacture", which is still required to be there.

The CBEC had issued Circular No. 904 on the amended definition of "excisable goods" which inserted the said "explanation" in the definition, which was on the test of "marketability" only hence was quashed by the honourable Allahabad HC in Balrampur Chini Case on the ground of not effecting the second test of "Manufacture".

Further, in recent Circular No.1006, CBEC has given clarification on Circulars quashed by the Supreme/High Courts particularly in para 3 as under;

"Therefore, it is clarified that Board Circulars contrary to the judgements of Hon’ble Supreme Court become non-est in law and should not be followed. Reference of such circulars should be made to the Board so that further action of rescinding these circulars can be expeditiously taken up. Board may also initiate such action suo-moto. All pending cases on the issue, including those in the Call-Book, decided after the date of the judgement should, conform to the law laid by the Hon’ble Supreme Court or High Court, as the case may be, irrespective of whether the circular has been rescinded or not."

Then, why the department is still insisting excise duty on fly ash??? and still what is required to be reached at finality? Circular 1006 had already done this task. Revenue prone attitude of the department needs to be changed.......

Anand Chauhan 18/11/2015