2015 (10) TMI 1562 - AT - Central Excise

Manufacture - Marketability - Intermediate product - Captive consumption - During the manufacture of beer, an intermediate product wort comes into existence and this product is captively consumed by the respondent-assessee. - held that - No grounds or any evidence brought forward by the Revenue against the above findings of the Tribunal. In the absence of any such evidence, we respectfully follow the earlier order of this Tribunal 2003 (9) TMI 485 - CESTAT, MUMBAI - Decided against Revenue.

Summary

Issues:
- Appeal against order passed by Commissioner (Appeals) regarding duty on intermediate product wort consumed by assessee.
- Interpretation of marketability of intermediate product for levy of duty under Central Excise Act.
- Comparison of judgments cited by both parties to support their contentions.
- Consideration of earlier Tribunal order in respondent-assessee's favor.
- Assessment of evidence and grounds presented by Revenue against Tribunal's findings.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT MUMBAI was lodged by the Revenue challenging the decision of the Commissioner (Appeals) concerning the duty liability on the intermediate product wort consumed by the respondent-assessee, a beer manufacturer. The original authority had initially dropped the demand, which was upheld by the Commissioner (Appeals), leading to the current appeal.

2. The primary issue revolved around the concept of marketability of the intermediate product wort for the imposition of duty under the Central Excise Act. The Revenue contended that wort is chargeable to duty, citing judgments such as Escorts Ltd. vs. CCE, Faridabad and Mettur Thermal Power Station vs. CBEC. Conversely, the respondent-assessee argued that the wort was not marketable, referencing a previous Tribunal decision in their favor and highlighting the absence of new grounds in the appeal.

3. The Tribunal examined the earlier order in the respondent-assessee's case, where it was established that for the levy of duty on an intermediate product, proving its marketability is crucial. The Tribunal reiterated the requirement of marketability for dutiability, drawing on legal precedents such as Cadila Laboratories Pvt. Ltd. v. CCE, Vadodara and UOI v. Delhi Cloth & General Mills Co. Ltd. The Tribunal emphasized that the burden of proving marketability rests with the Department.

4. In the absence of concrete evidence or grounds presented by the Revenue to challenge the Tribunal's previous findings on the marketability of wort, the Tribunal upheld the earlier order in favor of the respondent-assessee. The Tribunal dismissed the appeal filed by the Revenue, emphasizing the importance of establishing marketability for the imposition of duty on intermediate products consumed internally.

5. The judgment illustrates the significance of proving marketability in determining the dutiability of intermediate products under the Central Excise Act. It underscores the legal principles established by previous court decisions and the burden of proof on the Department to establish marketability. The Tribunal's decision highlights the need for concrete evidence and grounds to challenge established findings in legal proceedings involving duty liabilities on intermediate goods.