Goods under Central Excise Act


It is obvious from section 3(1) that, to attract excise duty, the following conditions must be fulfilled :
• There should be goods;
• The goods must be excisable;
• The goods must be manufactured or produced; and
• The manufacture or production must be in India.

Goods manufactured or produced in SEZ are “excluded excisable goods”. Thus, the goods manufactured in SEZ are not “Exempted goods”. They can be termed as “excluded excisable goods”.

Basic Ingredients
From the above definitions of ‘goods’, the two essential elements of goods are emanated:
(i) They should be movable, and

(ii) They should be marketable.

In order to be movable, an article must fulfill two conditions:

(i) It should come into existence (as a result of manufacture); and
(ii) It should be capable of being moved to market to be bought and sold

In order to be marketable, an article must fulfill three conditions:

(a) the goods should be capable of being sold in the market,
(b) the goods should be capable of being sold ordinarily, and
(c) the goods should be capable of being sold as such.

The following points can be noted –
• Marketability is to be decided on the basis of condition in which goods are manufactured or produced.
• Everything that is sold is not necessarily ‘marketable’.
• Waste and Scrap can be ‘goods’ but dutiable only if ‘manufactured’ and are mentioned in Tariff.
• The marketability test requires that the goods as such should be in a position to be taken to market and sold. If they have to be separated, the test is not satisfied. Thus, if machinery has to be dismantled before removal, it will not be goods – Triveni Engineering v. CCE AIR 2000 SC 2896 = 2000 AIR SCW 3144 = 40 RLT 1 = 120 ELT 273 (SC).
• Branded Software is goods. However, service tax will be payable on tailor made software after
Finance Bill, 2008 is passed.

next — Excisable Goods

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