2015 (12) TMI 322 - AT - Central Excise

Marketability - Captive consumption - whether the goods namely rubberized tyre cord fabric and rubber tread compound manufactured and consumed captively are marketable and consequently dutiable or otherwise - Held that - As regard rubberized tyre cord fabric, it is observed that demand was raised classifying the said product under Chapter heading 59.02 whereas it s correct classification is under Chapter heading 50.06, as held by Hon ble Supreme Court in the case of MRF Ltd (2008 (9) TMI 673 - CESTAT, BANGALORE) as well as in the appellant s own case of this Tribunal order 2013 (4) TMI 504 - CESTAT MUMBAI therefore admittedly the demand was confirmed under wrong classification. - department has not produced any evidence to prove that goods in question are marketable. For this reason also the contention of the Revenue regarding marketability is not acceptable. As regard the product namely rubberized tread compound the department has failed to bring any evidence to prove that the subject goods manufactured and consumed captively by the respondent is marketable and therefore the burden of proving that goods is marketable has not been discharged by the Revenue. - under similar facts, in the case of Metro Tyres Ltd 2002 (11) TMI 384 - CEGAT, NEW DELHI and Cipla Ltd.(2008 (3) TMI 330 - SUPREME COURT OF INDIA) this issue has been considered and was held that merely if movement of goods from one factory to another factory has taken place and the goods were used for captively the said reason can not be material factor to hold that the goods is marketable. - Decided against Revenue.

Summary

Issues:
1. Classification of goods under the correct tariff heading.
2. Determination of marketability of rubberized tyre cord fabric and rubber tread compound for excise duty.

Analysis:
1. Classification of Goods:
The appeal addressed the classification of rubberized tyre cord fabric under the correct tariff heading, which was erroneously done under Chapter Heading No. 59.02 instead of 59.06. The Tribunal noted that the demand confirmed under the wrong classification was not sustainable, citing the Supreme Court's judgment in a similar matter. The appeal was dismissed based on this issue.

2. Marketability of Goods:
The main issue revolved around the marketability of rubberized tyre cord fabric and rubber tread compound for excise duty. The Revenue contended that both products were marketable based on their identification in the market, even if not directly sold by the manufacturer. However, the respondent argued that the burden of proof lay with the Revenue to establish marketability, which they failed to do. The Tribunal found no evidence presented by the Revenue to support the marketability claim. Additionally, the respondent highlighted the short self-life of the rubber tread compound, making it unsuitable for sale to other manufacturers. The Tribunal emphasized that the absence of evidence and the nature of the goods led to the conclusion that they were not marketable.

In conclusion, the Tribunal upheld the Commissioner(Appeals)'s decision, stating that the Revenue did not discharge the burden of proof regarding marketability. The judgment emphasized the importance of evidence and precedent in determining the marketability of goods for excise duty purposes.