K. Shivashankar Bhat ( 1 ) THE only prayer that survives for consideration pertains to the taxability of the material called "sliver" obtained as an inprocess material in the manufacture of semi-worsted carpet yarn, in the factory of the petitioner company; the action taken by the Revenue to levy excise duty on this material under the provisions of the Central Excise and Salt Act, 1944 (the act ) is under challenge. At the time of filing the writ petition, validity of a few statutory provisions was raised, but, these provisions have been upheld in other cases. ( 2 ) THE basic question is whether this material referred as sliver is of a transient character which comes into existence during the manufacture of the semi worsted carpet yarn; in other words, whether this inprocess material, captively consumed, has actually an individual identity having a market, so that it can be considered as goods to attract the levy of excise duty. ( 3 ) THE petitioner-company in para 2 of the writ petition averred thus:- "the petitioner company manufacturers, inter alia, woollen yarn from raw-wool. This woollen yarn is of the grade which is only fit for Carpet making. In the process of manufacture of the end product woollen yarn from the raw material raw-wool, the raw- wool is processed and this processed raw wool obtained in the form of sliver is then spun into yarn within the continuous process in the same factory. sliver is only an in-process material. There is no removal of this sliver from the factory and it is not capable of being removed from the factory. This sliver is non- cohesive and is a brittle web of wool consisting of a collection of loosely held wood fibres. . It has no cohesive property and cannot stick together and remains in a very loose from. It is very brittle in nature and is liable to fall part by handling. It also gets entangled if it is not handled gently thereby becoming unsuitable for spinning. As such, this sliver is not marketable and is not marketed. "again in para 10 and 11 it is averred: (A) The petitioner No. 1 manufactures woolen yarn which is the end product made from raw-wool. The raw-wool is purchased by petitioner No. 1 from various Wool-Centres in India like Jamnagar (Gujarat, Bikaner (Rajasthan) and Panipat (Haryana) etc. As such, this sliver is not marketable and is not marketed. "again in para 10 and 11 it is averred: (A) The petitioner No. 1 manufactures woolen yarn which is the end product made from raw-wool. The raw-wool is purchased by petitioner No. 1 from various Wool-Centres in India like Jamnagar (Gujarat, Bikaner (Rajasthan) and Panipat (Haryana) etc. (b) This wool in its raw form is out from the back of the sheet. It is greasy in nature and contains large amount of impurities in the form of dirt, wax, vegetable matters etc. After the wool is purchased and brought into the factory, wool is opened in a cleaning machine and loose dirt and some vegetable matter is removed. Once the Wool is opened, it is cleaned and washed by the use of water, steam and detergents. The wool is washed and the impurities are removed. (c) The washed wool is then dried by passing the wool through drying chamber which contains heating devices. The wool is partially dried so that only about 14% of the moisture remains. After the wool is dried, the wool is then removed and opened in a machine called the preparatory willow. This machine separates the wool fibres and further removes the dirt and vegetable matter which may have remained in it. Thereafter, the wool may be dyed if so required. (d) Thereafter different types of wool are blended with an applicable of emulsion oil fro the purposes of smooth processing. The mixing of oil also makes the wool softer and makes processing possible. However, this oil evaporates in the process. (e) At this stage, the wool is conveyed to the spinning department in the factory. Here, the humid condition of 65% (+2%) is maintained. This humid condition is essential for processing. The wool after maturing is then put on to a carding miachine. This carding machine consists of cylindrical speed rollers which have pins mounted on their surface. The rolling of the wool on the cylindrical rollers, with pins straightens the fibres and opens the wool. This web of wool emerging from these rollers is pulled by a drawing head. This reduces the width of the carded web of wool and gives it the appearance of a cylindrical form being a merp collection of fibres. However, this cylindrical form consists of fibres of varying lengths which have been carded. This web of wool emerging from these rollers is pulled by a drawing head. This reduces the width of the carded web of wool and gives it the appearance of a cylindrical form being a merp collection of fibres. However, this cylindrical form consists of fibres of varying lengths which have been carded. There is no twist in these fibres and they are held together loosely in this form. the fibres are not fully straightened out. The fibres emerging from the roller in this form are not in a uniform cylindrical for which has an uneven diameter. This form of wool, which is still in its fibre form, may be described as Sliver. (f) This Sliver is then processed through three stages to make them more uniform in diameter and to further reduce the weight per meter to make it suitable for feeding into ring frames for spinning yarn. These machines are called Draft-O-Matic Machine, Inter Draw Frame and Finisher Draw Frame. (g) The Sliver so obtained in the process is fed into the spinning frame through the spinning ring where it is spun into. yarn. All this is done in the said spinning section. The Sliver obtained in the petitioner s process consists of a mere collection of loosely held fibres. The wool fibres in the Sliver are not of uniform lengths and are not parallellised and no oil is added. The Sliver has no cohesive properties and cannot stick together and remains in loose form. This sliver is very brittle in nature and is liable to fall apart by handling. It also get entangled if it is not hand-led gently, thus becoming unsuitable for spinning. If the Sliver falls apart or gets entangled, it becomes unfit for spinning and cannot be fed into ring frames for spinning. Moreover, it is important to maintain humidity condition in the spinning Section and the Sliver is not allowed to dry. If the moisture content is lost. Sliver dries and the fibre strands fall apart and collapse and become unfit for spinning. Sliver cannot be packed and transported in view of its non-cohesive and brittle nature. Any form of packing entailing even the slightest pressure would entangle the fibre and render it unfit for spinning. Upon such entanglement, it would cease to be Sliver. Because of the very nature of the Sliver, it s non-cohesive and brittle property as described above. Sliver cannot be packed and transported in view of its non-cohesive and brittle nature. Any form of packing entailing even the slightest pressure would entangle the fibre and render it unfit for spinning. Upon such entanglement, it would cease to be Sliver. Because of the very nature of the Sliver, it s non-cohesive and brittle property as described above. Sliver obtained in the Petitioner s factory as described above cannot be bought and sold in the market and is not a commodity which is known in the trade. " ( 4 ) PETITIONER, further states, that Sliver can also be converted into "tops" which are marketable; to make "tops" out of sliver further processing is essential, including addition of extra oil and passing it through combing machine. As a result of combing process, the long fibres remain thin and short and uneven fibres are removed and this gives cohesiveness to the fibres. Thereafter twisting is done in order to obtain marketable tops. To avoid entanglement, it has to be wound in the shape of balls on a Balling Machine. It is unnecessary to go on with the further stages of the story, except the diversion referred to in the case of semi worsted yarn which is used for carpet making where no weaving is done. Here, oil which is applied at the stage of spinning of fibres is an evaporating type of oil which remains in the inprocess material for about 3 to 4 days only; thereafter the oil evaporates; therefore the process of spinning must be completed in a continuous process within the same spinning section with the said period of 3 to 4 days. The process carried out for obtaining yarn fit for fabric weaving is entirely different, because, there, oil content of yarn should be maintained throughout the process. Therefore, the petitioner points out in para 14 of the writ petition: "it is clear from these respective processes using the evaporating type of oil (in the case of carpet yarn) as against ordinary oils, which is not of evaporating nature, (in the case of yarn for fabrics) that the sliver obtained in the petitioner s factory which is only suitable for spinning carpet yarn, must be subjected to the spinning process in continuity within a period of 3 to 4 days as to immediately complete the entire process of spinning. If the sliver is not spun into yarn within this period in continuity itwould become totally unfit for spinning and would have to be treated as waste. This amply illustrates that the type of sliver obtained at an intermediary stage in a continuous process of obtaining carpet yarn in the petitioner s factory cannot be described as marketable commodity. It has no shelf life and is not capable of being taken out of the factory for sale. " ( 5 ) PETITIONER has annexed to the writ petition, an affidavit of its Research and Development Manager, who is an expert in the field of manufacture of woollen yarn. This affidavit of Dr. Sailen Chaudhury elaborately details the process of manufacture and the nature of the sliver , which has only a transient character, without a shelf life of its own. Petitioner has also produced a few more documents, such as : (i) affidavit of two wool Merchants trading in raw wool, wool yarn etc. ; and (ii) a letter issued by the Deputy Director (Textiles) of the Indian Standards Institution, stating that Carded Gilled Sliver is not traded in; (iii) The certificate issued by Wool and Woollen Export Promotion Council (a body set up by Government of India), confirming that carded gilled slivers are only intermediate products and are not in marketable form; (iv) A letter from Prof. V. B. Gupta, Head of the Textile Technology, Department of Indian Institute of Technology, Delhi, stating that Sliver is not marketed. This letter affirms that slivers are intermediate materials obtained in the continuous yam manufacturing process and that the Sliver so produced does not have the necessary cohesion to make it a marketable product. Other supporting documents produced by the petitioner, are: (i) A letter from Shriram Institute of Industrial Research; (ii) A certificate from one Shail Chandra, a leading agent in India for various Australian companies exporting raw-wool and woollen tops (iii) Wool record- Weekly Market report dated 16. 2. 1979, which is published in U. K. which quotes the price of wool and various products of wool wherein no mention is found of any kind of slivers. ( 6 ) AS against the above plea of the petitioner and the materials placed before this court by the petitioner, respondents have chosen to file an affidavit which is too general. This additional affidavit dated 5. 5. ( 6 ) AS against the above plea of the petitioner and the materials placed before this court by the petitioner, respondents have chosen to file an affidavit which is too general. This additional affidavit dated 5. 5. 1993 has only two pages and the only relevant averments are in paras 3 and 4 which read:- "however, so as not to give an impression that there is no evidence available with the respondents to show that carded gilled sliver is amarketable commodity or not, I am annexing herewith as Annexure - A some documents which indicate that carded gilled sliver is actually bought and sold. I may also mention that carded gilled sliver is of two kinds combed and un-combed. The effect of this will be submitted during course of oral submissions, I may also mention that there is a distinction between goods which are marketable and which are marketable but not actually marketed. Submissions. in this regard also will be made during the course of hearing of the writ petition. "annexure a is a copy of the letter from the Rajasthan Small Industries Corporation Limited, and is dated September 1982 and is written to the Superintendent, Central Excise. The letter is unreadable; similar are the other documents, all of which are entirely unintelligible, being printed or typed ineligibly. The learned counsel for the petitioner pointed out that all these letters, invoices and gate passes pertain to worsted system and therefore, irrelevant to consider the case of Sliver of semi-worsted system. In the additional Rejoinder, petitioner pointed out that Rajasthan Worsted Spinning Mills was manufacturing worsted yarn and was adopting worsted process, involving combing operations, while, the unit of the petitioner has the serni worsted system in which no combing operation was involved. Petitioner has dealt with these documents filed by the respondents elaborately, and has been successful in proving them to be irrelevant to the issue involved in the present writ petition. ( 7 ) TWO questions require to be considered. The first pertains to the objection raised by Mr. Madan Lokur that the issue involved is one of fact, which could be raised before the statutory authorities and therefore, the writ petition is not maintainable, and the second one pertains to the merits of the case pleaded. ( 7 ) TWO questions require to be considered. The first pertains to the objection raised by Mr. Madan Lokur that the issue involved is one of fact, which could be raised before the statutory authorities and therefore, the writ petition is not maintainable, and the second one pertains to the merits of the case pleaded. ( 8 ) NORMALLY this court would relegate a petitioner to the statutory forums, to agitate the question, when, effective alternative forums are available under the Statute; this is more so, in the case of fiscal legislations. The writ petition was admitted on 24. 9. 1982 (more than 12 years ago) since, the validity of certain statutory provisions was raised in the writ petition. Now, these questions do not survive for consideration. However, we are of the view that after the lapse of such a long period, it will not be a proper exercise of our discretion, if we send back the petitioner to the Statutory authorities, the question on merits can be conveniently dealt with, by this court on the basis of unimpeachable materials placed before us. ( 9 ) IN Indofil Chemicals Ltd. Vs. Union of India; 1994 (73) ELT 9 , a Bench of this court, of which one of us (K. S. Bhatj.) was a member, negatived a similar objection to the writ petition; It was held, at page 19: "however, in the instant case the Revenue has taken a specific, categorical stand as to why the in-process material should be considered as goods under the Act and we have already found that the stand taken by the Revenue is not proper and the Revenue has mis- directed itself in its approach on the relevant question. Therefore, we do not think, we should dismiss the writ petition only on the ground that the petitioner has effective alternative remedies. "re: On Merits: ( 10 ) PETITIONER has placed abundant material to prove that slivers coming into existence in its factory, in the process of manufacturing semi- worsted yarn used to manufacture the carpets, has no market and that it has no identifiable personality which would survive the movements necessary in the marketing operations. It has no shelf life. Its existence is only of transient character. It has no shelf life. Its existence is only of transient character. The Revenue has confused the worsted system with the semi-worsted system and its faint attempt to prove that the sliver in question has a marketable life and a market was only with reference to the inprocess material involved in the worsted system. No specific denial of the averments in the writ petition is forthcoming in the counter of the Revenue. The expert opinions produced by the petitioner stand unrebutted. In the circumstances, we have no hesitation to hold that the inprocess material referred as Sliver or carded Gilled Sliver", coming into existence at an intermediate stage, in the petitioner s factory, in a continuous process of obtaining carpet yarn, cannot be considered as goods so as to attract the levy under the provisions of the Act. ( 11 ) MR. Lokur, contended that, there is a specific entry in the Schedule referring to sliver as goods, attracting the levy, and therefore, all kinds of Slivers are goods. ( 12 ) THIS contention also has no force. No doubt, when the entry refers to any material manufacture of which attracts the excise levy, it is reasonable to assume it to be goods . But, at the same time, it should be borne in mind that such an entrycould refer to only such of the materials or articles, which could be called goods having a market. If the entry refers to sliver , it only means, sliver of the kind, which has a market, as in the case of Sliver obtained in the worsted systems. ( 13 ) IN Bhor Industries Ltd. Vs. Collector of Central Excise; 1989 (40) ELT 280 , the Supreme Court indicated the above approach, at page 283: "it appears to us that under the Central Excise Act, as it stood at the relevant time, in order to be goods as specified in the entry the first condition was that as a result of manufacture goods must come into existence. For articles to be goods these must be known in the market as such or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary, user in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market as goods. That was necessary. Actual sale in the market is not necessary, user in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market as goods. That was necessary. "again at page 284: "therefore, the first principle that emerges is that excise was a duty on goods specified in the Schedule. In order to be goods an article must be something which can ordinarily come to the market and is brought for sale and must be known to the market as such. Therefore, the marketability in the sense that the goods are known in the market or are capable of being sold and purchased in the market is essential. "the observation at page 285 is directly on the point: "therefore, it is necessary,in a case like this, to find out whether there are goods, that is to say, articles as known in the market as separate distinct identifiable commodities and whether the tariff duty levied would be as specified in the Schedule. Simply because a certain article falls within the Schedule it would not be dutiable under excise law if the said article is not "goods" known to the market. Marketability, therefore, is an essential ingredient in order to be dutiable under the Schedule to Central Excise Tariff Act, 1985. " ( 14 ) THE. decision of the Supreme Court in Collector of C. Ex. Vs. Ambalal Sarabhai Enterprises; 1989 (43) ELT 214 refer to the burden on the Revenue to place acceptable material to justify the contention that an intermediate product is goods having a market of its own, so as to attract the levy under the Act. The court also emphasised the requirement that any product to be called goods , "it must be something which can ordinarily come to the market to be bought and sold and is known to the market" (vide page 217 last sentence ). ( 15 ) MR. Lokur Relied on on the decision of the Supreme Court in A. P-State Electricity Board Vs. Collector of Central Excise. Hyderabad; }t 1994 (1) SC 545. Court found that the goods in question (prestressed Cement concrete pole) was marketable and the fact that the market was confined to one purchaser would not render it as unmarketable. The court also held that marketability of the article in question is a question of fact. Collector of Central Excise. Hyderabad; }t 1994 (1) SC 545. Court found that the goods in question (prestressed Cement concrete pole) was marketable and the fact that the market was confined to one purchaser would not render it as unmarketable. The court also held that marketability of the article in question is a question of fact. ( 16 ) IN Indofll Chemicals Ltd. case (1994 [73] ELT 9), the Bench referred to several decisions of the Supreme Court, wherein this court Distinguished the decision rendered in A. P. State Electricity Board case. ( 17 ) THE learned counsel for the Revenue referred to a decision of the Tribunal in Swastic Woollens and others Vs. Collector of Customs, Bombay; 1988 (34) ELT 85 to point out sliver is a marketable commodity. We do not think it so. The commodity involved therein was in fact woollen waste , which included the waste out of slivers. It is the petitioner s case that sliver that comes into existence for a short period in its factory will become a waste , if it is sought to be sold elsewhere/by taking it out of the factory. ( 18 ) IN Tranasia Carpets Ltd. and another Vs. Union of India and others; C. W. 1248/1980 decided on 23. 1. 1990, under similar circumstances, a Bench of this Court held that the Sliver emerging at the intermediate stage during the manufacture of woollen yarn is not excisable as it is not marketable. It was held that sliver cannot be packed or transported unless processes like combing, false twisting and balling are done. ( 19 ) IN the result, this writ petition is allowed. It is declared that the sliver coming into existence in the petitioner s factory is not liable to the levy under the Act and the respondents are restrained from levying the duty under the Act. The impugned notices/letters referred in para 28 (e) of the writ petition are quashed. Rule made absolute. No costs.