2014 (12) TMI 1084 - AT - Central Excise

Marketability - Manufacture of sugar solution (concentrated sugar syrup according to the Revenue) - Captive consumption - Held that - just because the product can be kept for a week, it cannot be said that the same is marketable. There is no evidence of marketability produced by the Revenue either before the Commissioner or in the appeal memorandum. Further, we also find that the decision of the Hon ble Supreme Court in the case of Moti Laminates Pvt. Ltd. (1995 (2) TMI 67 - SUPREME COURT OF INDIA) is applicable to the facts of this case as regards marketability. Commissioner has considered the marketability aspect and also use of preservatives. We find that the Commissioner s order is in accordance with law and principles of classification and determination of liability of goods for excise duty. Hence it requires no interference - Decided against Revenue.

Summary

Issues: Duty demand on sugar syrup for captive consumption without payment of duty.

Analysis:
1. The respondent was engaged in manufacturing crocin syrup without paying duty on the sugar syrup used in the process. The Revenue initiated proceedings demanding duty for the period from 1-9-1996 to 31-3-2001.

2. The Commissioner dropped the demand, leading the Revenue to appeal, arguing that the sugar syrup used in manufacturing crocin syrup should be levied with central excise duty.

3. The Revenue contended that the sugar syrup contained preservatives, making it marketable and thus chargeable to duty as per Circulars issued by the Board. The admission by the Managers regarding the presence of preservatives supported this argument.

4. The respondent's counsel relied on a Supreme Court decision to argue that marketability is essential for duty imposition. They distinguished between sugar syrup and sugar solution, asserting that the product in question was not marketable as sugar syrup.

5. The Tribunal analyzed the marketability aspect and use of preservatives. The Commissioner's order was upheld as it correctly applied the law and principles of excise duty liability determination. The appeal by the Revenue was dismissed for lack of merit.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal principles applied by the Tribunal, and the reasoning behind the decision to reject the Revenue's appeal.