2014 (1) TMI 51 - AT - Central Excise

Whether slurry yeast is an excisable commodity or not - Held that - Following Nicholas Piramal India Ltd. v. CCE, Mumbai 2010 (11) TMI 36 - SUPREME COURT OF INDIA - The marketability of a product has to be established by the department by leading evidence to the fact that how the product is commercially known and how it is capable of being marketed - Shelf life of a product would not be a relevant factor to test the marketability of a product unless it is shown that the product has absolutely no shelf life or the shelf life of the product is such that it is not capable of being bought or sold during that shelf life - There is no corroborative evidence adduced by the department to establish the marketability of slurry yeast which has a shelf life of two days - The department has failed to establish the marketability of the goods - Decided against Revenue.

Summary

Issues:
1. Whether slurry yeast arising in the course of beer manufacture is a marketable commodity and liable to excise duty.

Analysis:
The departmental appeal challenged the order-in-appeal that deemed slurry yeast not liable to excise duty as it was considered not marketable. The department argued that the yeast, with a shelf life of two days, could be marketed, citing a precedent where actual sales were not necessary to establish marketability. The Commissioner (Appeals) relied on a different judgment where yeast with a shelf life of 6 to 8 hours was not duty liable. The department contended that the yeast in question could be marketed due to its two-day shelf life, distinguishing it from the precedent. However, the tribunal found no evidence of the yeast being marketed or in a marketable form. It emphasized that shelf life alone does not determine marketability, requiring evidence of commercial recognition and capability for marketing. Citing a Supreme Court case, the tribunal clarified that a product's shelf life does not automatically make it marketable unless supported by additional evidence of actual or potential marketing. As the department failed to provide such evidence, the tribunal rejected the appeal, concluding that the goods were not excisable due to lack of proven marketability.