2011 (4) TMI 688 - AT - Central Excise

Marketability - Flavoured cream - Intermediate product - The issue of marketability in relation to the flavoured cream has sought to be confused with the issue of the marketability of the final product - While observing that the issue in relation to the marketability of the intermediate product is to be decided independently of the issue of marketability of the final product the Tribunal had set aside that order and had remanded the matter to Adjudicating Authority to decide the issue of marketability relating to the product in question independently of similar issue relating to the final product.

Summary

Issues:
1. Marketability of flavoured cream used as an intermediate product in the manufacture of biscuits.
2. Confusion between the marketability of the intermediate product and the final product.

Issue 1: Marketability of flavoured cream:
The case involved appeals related to the period from October 2008 to June 2009 concerning the use of flavoured cream as an intermediatory product in biscuit manufacturing. The central issue was the marketability of this cream, with a focus on whether it should be considered independently of the final product's marketability. The Tribunal highlighted that the authorities had erred by not assessing the marketability of the flavoured cream separately from the final product. Drawing parallels with a previous order related to sugar syrup, the Tribunal emphasized the need to evaluate the marketability of the intermediate product on its own merits. Consequently, the impugned orders were deemed unsustainable, set aside, and remanded to the Adjudicating Authority for an independent assessment of the marketability of the flavoured cream.

Issue 2: Confusion between marketability of intermediate product and final product:
The Tribunal noted a recurring mistake by the authorities in conflating the marketability of the flavoured cream with that of the final product, similar to the error made in a previous case concerning sugar syrup. By reiterating the necessity of evaluating the marketability of the intermediate product independently, the Tribunal emphasized the importance of distinguishing between the two aspects. The impugned orders were consequently set aside, and the matters were remanded to the Adjudicating Authority for a fresh assessment of the marketability issue, guided by relevant observations from previous tribunal orders. This decision aimed to ensure a proper evaluation of the marketability of the product in question, separate from considerations related to the final product, in line with established legal principles.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Delhi underscores the significance of independently assessing the marketability of intermediate products in manufacturing processes, highlighting the need to avoid confusion with the marketability of final products. The Tribunal's emphasis on separate evaluations for intermediate products aligns with legal principles to ensure accurate adjudication in excise matters.