2015 (2) TMI 1114 - AT - Central Excise

Marketability of the sugar syrup - Excise duty on Intermediate products - Held that - The Tribunal in number of cases has considered the assesses stand that such sugar syrup which comes into existence in the factory is not marketable and the matter stand remanded to the lower authorities to consider the said submission of the assesses as regards the marketability of the sugar syrup. By adopting the same we set aside the impugned order and remand the matter to the original adjudicating authority for fresh consideration in the light of the observations made in the case of Pahal Foods (2013 (11) TMI 1601 - CESTAT BANGALORE) as also one made in the case of Homemade Bakers (India) Pvt. Ltd. Vs. CCE Rohtak 2012 (7) TMI 673 - CESTAT NEW DELHI . - Decided in favour of assessee by way of remand.

Summary

Issues:

1. Whether duty liability arises on sugar syrup produced during the manufacture of exempted biscuits?
2. Whether the sugar syrup is marketable and subject to duty liability?

Issue 1: Duty liability on sugar syrup produced during the manufacture of exempted biscuits

The appellant, engaged in biscuit manufacturing, faced proceedings for duty demand on sugar syrup produced during the process. The Revenue argued that since the final product was exempted, duty should be levied on the sugar syrup. The impugned order confirmed duty of Rs. 2,42,778 for a specific period. However, a subsequent notification exempted sugar syrup used in biscuits with an MRP below Rs. 100. The Tribunal noted a similar case where the matter was remanded to assess the marketability of the sugar syrup.

Issue 2: Marketability of sugar syrup and duty liability

The Tribunal considered previous cases where assesses claimed that the sugar syrup produced in the factory was not marketable. Following this precedent, the impugned order was set aside, and the matter was remanded for fresh consideration. The Tribunal directed the original adjudicating authority to review the marketability of the sugar syrup in line with observations from previous cases. The appeal was allowed by way of remand, emphasizing the need to determine the marketability of the sugar syrup in question.

This judgment highlights the crucial aspect of duty liability on intermediate products in the manufacturing process of exempted goods. The decision underscores the importance of assessing the marketability of such intermediate products to determine duty liability accurately. By remanding the matter for further consideration, the Tribunal ensures a thorough evaluation of whether the sugar syrup is indeed marketable and subject to duty, aligning with past decisions and legal principles in similar cases.