2003 (9) TMI 485 - AT - Central Excise

Summary

Issues: Classification of 'WORT' under Central Excise Tariff Act, 1985

In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand is whether 'WORT,' an intermediate product in the brewing of beer, should be classified under heading 1901.91 of the Central Excise Tariff Act, 1985, and if it is subject to duty under the Central Excise Act. The Tribunal considered the marketability of 'WORT' and its classification under the Tariff Act.

Analysis:

1. The Tribunal noted that 'WORT' is an intermediate product and emphasized the importance of establishing its marketability for the levy of duty under the Central Excise Act. Citing the Supreme Court's decision in Cadila Laboratories Pvt. Ltd. v. CCE, Vadodara, the Tribunal held that the burden of proof of marketability lies with the Department. The Tribunal rejected the notion that 'WORT' is automatically marketable simply because it is consumed captively and not sold.

2. The Tribunal referred to the case law, including UOI v. Delhi Cloth & General Mills Co. Ltd., to highlight that for an article to be considered 'goods' and subject to duty, it must be capable of being bought and sold in the market. The Tribunal emphasized that 'marketability' is a crucial test for determining dutiability, and mere assumption of marketability without concrete evidence is insufficient to levy duty on an intermediate product like 'WORT.'

3. The Tribunal considered the control of 'WORT' by the Brewery Officer of State Excise and referenced the Delhi High Court Division Bench's decision in Delhi Cloth and General Mills Ltd. case. The Tribunal noted that the controls imposed by State enactments on the process of 'WORT' production may impact its marketability. The Tribunal highlighted the need for the investigators and the Commissioner to apply the test of goods being bought and sold in the market to determine the marketability of 'WORT.'

4. Since the Tribunal found a lack of evidence regarding the removal and marketability of 'WORT,' it concluded that the classification of 'WORT' under the Tariff Act was not applicable. The Tribunal emphasized that only goods that are held to be excisable can be classified under the Tariff Act. Therefore, in the absence of evidence supporting the marketability of 'WORT,' the classification issue did not arise.

5. Based on the above findings, the Tribunal set aside the order and allowed the appeals, concluding that the 'WORT' in question was not subject to duty under the Central Excise Act due to the lack of evidence supporting its marketability.

In conclusion, the Tribunal's judgment underscores the significance of establishing the marketability of intermediate products like 'WORT' for the levy of duty under the Central Excise Act and the classification under the Tariff Act. The decision highlights the need for concrete evidence and application of legal tests to determine the dutiability of such products.