Goods exempt from duty whether excisable under Goods & Excisable goods :

Having held that in order to constitute ‘goods‘ under excise law, articles must be moveable and marketable, let us now turn to the definition of excisable goods under the Act. Section 2(d) defines excisable goods as goods specified in the Schedule to the Central Excise Tariff Act, 1985 as being subject to the duty of excise and includes salt. In other words, all goods specified or covered in the Tariff will be known as excisable goods. This brings us to the important point in law that goods, which are exempt from duty under a notification, are nevertheless excisable goods as long as they are covered by any of the headings of the Central Excise Tariff. This point in law was earlier in doubt. The Allahabad High Court had taken the view in couple of cases that fully exempted goods were meant to be taken out of the Schedule to the Tariff Act and hence cannot be treated as excisable goods at all. However, the Delhi, Andhra Pradesh and Madras High Courts took the view that fully exempted goods continued to be excisable goods.

Finally, the Supreme Court‘s decision in Wallace Flour Mills Ltd. Vs. C.C.EX. (1989) (44) ELT- 598 has effectively settled the issue. It was held therein that fully exempted goods were also excisable goods and hence were chargeable to duty if the exemption was removed prior to removal of goods but subsequent to manufacture.

Even full exemption from duty under a notification does not make goods as non-excisable. [UOI v. Nandi Printers P Ltd. 2001 (127) ELT 645 (SC)]