JUDGMENT - H. SURESH, J.:---The petitioner, a company, has a factory in which it manufactures tyres, tubes and other rubber products. The process of manufacturing tyres, involves the making of what is known as tyre carcass consisting of rubberised rayon and nylon cords. Such rayon and nylon cords are coated with a rubber compound, but before they are so coated, it is necessary to treat them with another solution in order to achieve a good adhesion of rubber to such cords. The solution that is used in the tyre industry is generally described as a Resorcinol Formaldeyde Latex mix or dip solution which is a mixture of six substances known as resorcinol, formaldehyde, caustic soda, styrene butadine latex, vinyl pyeidine latex and water. The question in this petition is as to whether this dip solution becomes liable for any excise duty and whether this item comes within Item No. 15-A of the Tariff. 2. The petitioner says that this mixture has to be consumed within a few hours of its manufacture as after some time the same becomes unusable. The said solution is prepared within the factory of the petitioner and it is consumed within the factory itself and it is at no time or stage removed from the said factory anywhere else. 3. Some time in June 1977 certain samples of the said dip solution were drawn by the Inspector of Central Excise and were sent to the Deputy Chief Chemist for test. For the purpose of the test the petitioner supplied the requisite information including the composition of the said dip solution. The Chemist gave his report on the basis of which the department informed the petitioner that the said dip solution fell under Item No. 15-A(1)(i) of the Tariff and Central Excise and Salt Act. It appears that when the department passed the aforesaid order the petitioner had not been heard, and therefore, the petitioner had to file a Writ Petition in this Court being Writ Petition No. 525 of 1978. However, on April, 25, 1978 the said petition was withdrawn on an assurance given by the respondents that no orders would be passed in the said matter without furnishing to the petitioner, a copy of the said test report and without hearing the petitioner. Accordingly, a copy of the said report was furnished to the petitioner and the petitioner was also heard. Accordingly, a copy of the said report was furnished to the petitioner and the petitioner was also heard. The petitioner was also given an opportunity to cross-examine the Deputy Chief Chemist who gave the report to the department. 4. After such hearing, by an order dated April, 24, 1980, the Assistant Collector of Central Excise came to the conclusion that the said dip solution was assessable to duty under Item No. 15-A of the said Tariff. As against the said order the petitioner preferred an appeal to the Collector of Central Excise, and during the pendency of the appeal, the petitioner filed the present writ petition. Thereafter, by an order dated April, 21, 1981, the Collector of Central Excise reversed the decision given by the Assistant Collector and held tat the said dip solution was to excisable under Tariff Item No. 15-A. It appears that the Government has gone in review and the same is still pending. 5. Before I deal with the relative merits of the case, I must set out the relevant portion of Tariff Item No. 15-A(1) and it is as follows :--- "Artificial or synthetic resins and plastic materials, and other materials and articles specified below --- (1) ....... artificial resins obtained by esterification of natural resins or of resinic acids (ester gums), chemical derivatives of natural rubber (for example, chlorinated rubber, rubber hydrocloride, oxidised rubber, cyclised rubber), other, high polymers, artificial resins and artificial plastic materials, including alginic acid, its salts and esters; linoxyn;" 6. It is the contention of Mr. Talyarkhan, who appears for the petitioner, that this dip solution cannot be considered as artificial or synthetic resin at all and, therefore, it could never have been considered under Item No. 15-A(1) of the tariff. He also contends that this dip solution is not being sold from the factory and in any event it is not capable of sale to any consumer. He further submits that the department has not been able to show as to how this item can be considered as a marketable item and that, therefore, this could be charged for excise. 7. In this connection Mr. Talyarkhan firstly drew my attention to certain paragraphs wherein we find certain answers given by the Deputy Chief Chemist when he was cross-examined. The relevant portions are as follows : A-5 : The factory is first preparing a resorcinol formaldehyde Resin in aqueous solution. 7. In this connection Mr. Talyarkhan firstly drew my attention to certain paragraphs wherein we find certain answers given by the Deputy Chief Chemist when he was cross-examined. The relevant portions are as follows : A-5 : The factory is first preparing a resorcinol formaldehyde Resin in aqueous solution. This is then mixed with rubber latex which they called as dip solution. This dip solution is taken for the tyre cord dipping. O.6 : Whether at any stage any stabilisers were added to the solution or did it contain any ? A.6 : As per the factory's declaration and the process shown to me they do not add any stabilisers. O.34 : As far as processing of dip solution is concerned by the Ceat there is no separation of the resin by precipitation or other means. Also the reaction is not arrested and it continues and therefore the material is to be used in the prescribed time. If the solution prepared by Ceat is kept for a long time, the reaction continues and what product comes out of it is not useful for any purpose. Keeping this factor in mind it can ever be said that what Ceat processes in resin, but it is dip solution only ? A.34 : Dip solution is phenoplast in liquid form. If they do not arrest by putting stabilisers keeping it for a long time without proper care and preservation, just like any material gets spoiled, this will also get spoiled." Mr. Talyarkhan submitted, therefore, that without the addition of stabilisers the solution cannot be preserved and it has no life as such. He, therefore, submitted that this dip solution is not marketable at all. He then drew my attention to what is aid by the Appellate Collector in this behalf and the relevant portion is as follows : "Let us now examine the product in question. It is stated that dip solution is prepared in two stages. In the first stage, all chemicals in requisite quantities except laticas are mixed together under controlled conditions of temperature, inter alia so as to ensure that the temperature thereof do not rise above 24 to 27 degrees sentigrade. This solution after reacting or specific period (4 to 6 hours) is then added to a requisite quantity of latex or latices kept at ambient temperature. This solution after reacting or specific period (4 to 6 hours) is then added to a requisite quantity of latex or latices kept at ambient temperature. This final mixure of the dip solution then become ready for processing and is to be consumed within a few hours, as thereafter it becomes unusable. The Deputy Chief Chemist at the time of his cross-examination deposed that dip solution can be kept for long by addition of stabilisers etc. and since they (appellants) do not want to keep dip solution they immediately take it to the process and he also admits that the appellants do not add any stabilisers, while replying to question 17 and 18. Thus it is seen that the product as manufactured by the appellants cannot be brought to the market. Therefore I agree with the appellate's contention that the dip solution is not goods within the meaning of section 3 of the Central Excise and Salt Act, 1984, as judicially interpreted by the Courts. It is merely as in process material for use in the manufacture of tyres. Since dip solution is not goods it is not liable to excise duty under any of the T.I. mentioned in the first schedule to the Central Excise and Salt Act 1944 much less under T.I. 15-A. Dip solution is not known in the market as resin. In fact it is a solution of resins and other substances. Dy. Chief Chemist had described the products the same is in the form of pale brown coloured liquid. It is an aqueous dispersion viz. of reaction of products of vinyl pyridine latex, resorcinol and formaldehyde. It given tack free coating. At the time of his cross examination, he further elaborated that the appellants were first preparing resorcinol and formaldehyde resin in aqueous solution, which is then mixed with rubber latex and the resultant product is known as dip solution. Thus it is not that the resin is in liquid form, but solution of resin which according to the Delhi High Court's judgment in the case of Indian Plastic Chemicals Pvt. Ltd. 1981 E.L.T. 108 (DEL) cannot be excisable under T I. 15-A. Court also held that the resin in item 15-A regress to the resin as fully manufacture and not to any solution of resin. Thus, in any case dip solution is not liable to excise duty under T.I. 15-A." 8. Mr. Thus, in any case dip solution is not liable to excise duty under T.I. 15-A." 8. Mr. Talyarkhan also relied upon the case of (Indian Plastics Chemicals Pvt. Ltd. v. Union India others)1, reported in 1981 E.L.T. 108 (Del.) which is the case decide by the Delhi High Court. In this case the Delhi High Court considered the question as to whether the product, in that case, can be regarded as artificial or synthetic resin in liquid form after taking note of the fact that Item No. 15-A refers to all type of artificial and synthetic resins. The Court said as follows :--- "To my mind this product cannot be regarded as artificial or synthetic resin in liquid form. It is, at best a solution of resin which is not covered by the aforesaid entry. Reference in this behalf may also usefully be made t the instructions which have been issued by the Central Board of Customs and Excise. In the said instructions it has been inter alia stated as follows :--- "Solution of artificial or synthetic resin in volatile organic solvent, are excluded from the scope of this item, if and when the weight of such solvent exceeds 50 per cent of the weight of the solution. In other cases the duty should be levied on the actual weight of the resin contained in the solution and not on the total weight of the solution." The aforesaid instructions, refer to solutions, in organic solvent. The important point, however, is that it is recognised that where the solvent exceeds 50 per cent of the weight of the solution then such a product cannot be regarded as being covered by Item No. 15-A. In the same instructions it is also stated as follows :--- "When the solvent is other than volatile organic one, if the weight and volume of the resin of basic plastic material can be determined, that quantity used attracts duty; if not, duty would be payable on the total weight and volume of the solution irrespective of the weight of solvent added." The aforesaid shows two things. Firstly, resin in item 15-A refer to the resin as fully manufactured and not any 'solution of resin.' Secondly, if more than 50 percent weight is that of solvent then the product cannot be regarded as 'resin' a all. Firstly, resin in item 15-A refer to the resin as fully manufactured and not any 'solution of resin.' Secondly, if more than 50 percent weight is that of solvent then the product cannot be regarded as 'resin' a all. There may be force in the contention on behalf of the respondent that these instructions are not binding. But these instructions the Government has, to my mind, sought to explain the meaning of the aforesaid Item No. 15-A". 9. In any event, for the purpose of showing that there can be no excise duty as the product is not marketable at all, Mr. Talyarkhan relied upon a recent case of the Supreme Court in the case of (Union Carbide India Ltd. v. Union of India and others)2, reported in 1986(24) E.L.T. 169 S.C. That was a case where the Union Carbide India Ltd., which is carrying on a business of manufacture and sale of flashlights (torches), dry cell batteries, chemicals and plastics, were also producing aluminium slugs from the manufacturers of aluminium in India and were producing aluminium cans or torch bodies by a process of extrusion. The department contended that aluminium cans were liable for excise duty under Item No. 27(e) of the Tariff. The company contended that aluminium cans were neither sold nor were capable of being sold in the market and, therefore could not be described as the goods for the purpose of Central Excise and Salt Act. It was also asserted that the preparation of aluminium cans out of aluminium slugs did not amount to manufacture, and that aluminium cans were merely an intermediate product in the manufacturer of flashlights. There contentions did not find favour with the excise authorities. But the Supreme Court upheld these contentions. I may mention that while deciding this particular case the Supreme Court referred to two earlier cases viz. the case of (Union of India v. Delhi Cloth General Mills)3, (1963) Supp. 1 S.C.R. 586, and the other, the case of (South Bihar Sugar Mills Ltd. etc. v. Union of India others)4, 1978 E.L.T. J 336 S.C. The relevant observations of the Supreme Court at page 172 are as follows : "The question here is whether the aluminium cans manufactured by the appellant are capable of sale to a consumer. 1 S.C.R. 586, and the other, the case of (South Bihar Sugar Mills Ltd. etc. v. Union of India others)4, 1978 E.L.T. J 336 S.C. The relevant observations of the Supreme Court at page 172 are as follows : "The question here is whether the aluminium cans manufactured by the appellant are capable of sale to a consumer. It appears on the facts before us that there are only two manufacturers of flashlights in India, and appellant being one of them. It appears also that the aluminium cans prepared by the appellant are employed entirely by it in the manufacture of flashlights and are not sold as aluminium cans in the market. The record discloses that the aluminium cans, at the point at which excise duty has been levied, exist in a crude and elementary form incapable of being employed at the stage as a component in a flashlight. The cans have sharp uneven edges and in order to use them as a component in making flashlight cases the cans have to undergo various processes such as trimming, threading and redrawing. After the cans are trimmed, threaded and redrawn they are reeded, beaded and anodised or painted. It is at that point only that they become a distinct and complete component, capable of being used s a flashlight case for housing battery cells and having a bulb fitted to the case. We find it difficult to believe that the elementary and unfinished form in which they exist immediately after extrusion suffices to attract a market. The appellant has averred in affidavit that aluminium cans in that form are unknown in the market. No satisfactory material to the contrary has been placed by the respondents before us. Reference has been made by the respondents to the instance when aluminium cans were ordered by the appellant from Messrs. Krupp Group of Industries. This took place, however, in 1966 as a solitary instance, and what happended was that aluminium slugs were provided by the appellant to Messrs Krupp Group of Industries for extrusion into aluminium cans. The facts show that the transaction was a works contract and nothing more. Apparently, the appellant made use of the requisite machinery owned by that firm for extruding aluminium cans. Not a single instance has been provided by the respondents demonstrating that such aluminium cans have a market. The facts show that the transaction was a works contract and nothing more. Apparently, the appellant made use of the requisite machinery owned by that firm for extruding aluminium cans. Not a single instance has been provided by the respondents demonstrating that such aluminium cans have a market. The record discloses that whatever aluminium cans are produced by the appellant are subsequently developed by it into a complete and perfected component for being employed as flashlight cases." 10. In the present case, it is clear that the dip solution in the condition and as it is found, in the petitioner company, is not saleable at all. There is no market for such a solution. In any event, no satisfactory evidence has been placed, at any stage, to show that such an item attracts a market. The material on the other hand clearly show that the solution is manufactured and used by the petitioner alone and, therefore, in my view this case must directly apply to the facts of the present case. If that is so , the petitioner must succeed. 11. However, the department think otherwise,. Mr. Pochkhanwalla, appearing for the department, firstly relied on the definition and the technical meaning of this dip solution as given in various text books and encyclopaedia of chemical technology. The relevant portions from the various books are as under : "Rubber Technology and Manufacture (By C M. Blow And C. Hepburn, at pages 333 and 334) (IInd Edition.) "One of the earliest systems for bonding rayon was based on resorcinol-formaldehyde resin and natural rubber latex, but the material suffered from a limited pot life, Butadiene-styrene and vinyl pyridine copolymer latices, in admixture with resorcinol-formaldehyde, followed. A later development was isocyanate adhesive. A modification of the latter was the formation of adducts, which were water soluble for easier application. With combinations of these systems, the range of fibres available can be pre-treated so that they will adhere to any rubber." Encyclopaedia of Chemical Technology By Kirk-Othmer, at page 464) IIIrd Edition. "Tire cord (qv) is normally first treated with rubber latex to improve adhesion to the vulcanised rubber. The latex dip solution often contains additives to further improve adhesion. Resorcinol-formaldehyde resins are commonly used but amino resins are also effective. Both urea and melamine resins are described in the patent literature but melamine resins are preferred." Encyclopaedia Britannica (Volume VIII. "Tire cord (qv) is normally first treated with rubber latex to improve adhesion to the vulcanised rubber. The latex dip solution often contains additives to further improve adhesion. Resorcinol-formaldehyde resins are commonly used but amino resins are also effective. Both urea and melamine resins are described in the patent literature but melamine resins are preferred." Encyclopaedia Britannica (Volume VIII. At page 526) XVth Edition. "Resorcinol, orm-Dihyanrvybenzene, molecular formula C-6 H-4 (OH)2, a phenolic compound used in the manufacture of resins, plastics. dyes, medicine and numerous other organic chemical compounds. It is produced in large quantities by sulfonating benzene with fuming sulferic acid and fusing the resulting benzene disulfonic acid with caustic soda. The activating action of the two hydroxyl (OH) groups makes the compound highly susceptible to substitution reactions. Reaction with formaldehyde produces resins used extensively as predips before impersonating rayon and nylon with rubber." On the basis of these definitions, Mr. Pochkhanwalla pointed out that this item can be termed as resin and, therefore, if it is so, the same comes under Item 15-A of the Tariff. 12. Mr. Pochkhanwalla has also drawn my attention to two judgments, one of the Bombay High Court and the other of the Supreme Court. The first is the case of (M.R.F. Ltd. v. Union of India)5, reported in 1985(22) E.L.T. 5 (Bom.). He referred to this judgment to point out, what is important is that a particular item is manufactured by the company and that is sufficient, provided the said item comes under any of the Tariff items. In this case the question involved was as to whether rubberised tyre cord warp sheets can be considered as an item which would be liable for Excise duty. By referring to certain observations in this particular case Mr. Pochkhanwalla pointed out that marketability is not the test but the test is whether the manufacturer has manufactured a particular item, and even if the same is not put i the market that would not make any difference to the chargeability of the substance to excise duty if it is covered by an item in Schedule 1 of the Act. I am afraid that these observations may not apply to the present case inasmuch as in para 13 of the said judgment the Court had come to the conclusion that the material was saleable. I am afraid that these observations may not apply to the present case inasmuch as in para 13 of the said judgment the Court had come to the conclusion that the material was saleable. If that is so, this case can easily be distinguished from the case before me. 13. The other case which is of the Supreme Court is the case of (S.B. Sugar Mills Ltd. v. Union of India)6, reported in 1978 E.L.T. (J336). The relevant observations are in para 14 of the judgment. The question involved in this case was one relating to what is known as Kiln gas. However in my view, I need not deal with this authority at all, inasmuch as the Supreme Court while deciding the case of Union Carbide India Ltd., referred to above, had taken into account this very case and, thereafter, laid down the proposition that for the purpose of chargeability the goods must be such as to have a market or must be saleable. 14. Mr. Pochkhanwalla has also relied upon a case decided by the CEGAT viz. the case of (Collector v. Jay Enterprises and 5 others)7, reported in 1987(29) E.L.T. 288 (Tribunal). This is a case where the question was one relating to manufacture of resin. The judgment deals with the details of the product and points out that there are various stages in the manufacture. They are set out in para 8 of the judgment. After setting out these various stages the Tribunal goes to observe that in the case of resins there are so many varieties and these have wide-ranging shelf lives ranging from a few days to couple of months or even more. The Tribunal further observes that the product has a short shelf life and that it has been conceded by the learned advocate that it can be kept for as long as 15 days. On the basis of this the Tribunal observes that at that sage the material could be sold to a consumer or a buyer. The Tribunal of course, has negatived the contention of the manufacture that the product manufactured by the company should marketable. This case again can be distinguished on tow counts. On the basis of this the Tribunal observes that at that sage the material could be sold to a consumer or a buyer. The Tribunal of course, has negatived the contention of the manufacture that the product manufactured by the company should marketable. This case again can be distinguished on tow counts. Firstly, there is a concession by the Advocate of the manufacturers that the particular product could be kept for about 15 days and that it could be sold to the consumer or a buyer if they required the same. Secondly, to the proposition that whether the product is marketed or sold would not make any difference appears to be in contradiction to what the Supreme Court has stated. If that is so, this approach of the Tribunal cannot be a guiding factor for the purpose of deciding the matter which is before me. 15. Mr. Talyarkhan has laid great emphasis on the fact that the evidence of the Deputy Chief Chemist itself shows that without the addition of the stabilisers, this particular solution has no life at all and it gets spoiled. There is no other material before me to hold otherwise. If that is so, in my view, this item without any stability whatsoever has no shelf life at all, and therefore, the material would be spoiled within a short time and, therefore, it cannot be considered as an item which would come under Item No. 15-A(1). In any event, it is clear that this item is not marketable at all and if that is so having regard to the judgement of the Supreme Court, the same can not attract any charge of excise under the Act. 16. In the result, the petitioner must succeed. I, therefore, pass the following order : Rule is made absolute in terms of prayer (b). However, in the circumstances of the case, there would be no order as to costs. Rule made absolute. -----