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2018 (1) TMI 1535 - AT - Central ExciseMarketability/excisability - intermediate goods - Poly Propylene Multi Filament Yarn (PPMFY) - the case of the Department is that since the final product NWF was exempted vide N/N. 30/2004 dated 09.07.2004, the exemption provided under N/N. 67/95 dated 16.03.1995 (an intermediate product) is not admissible, and the appellant is required to pay duty - HELD THAT - The appellants unit is a composite unit and doing continuous manufacturing process wherein spinning of semi-finished PPMFY is being done followed by subsequent process like stretching, winding, warping and braiding is done on a needle loom - PPMFY in the stage it is generated is not marketable, being integrated and inter-winded in a continuous process, the yarn threads are still open with oil contact and are not even open at the stage of being coned or paper coned or paper tubed and still the said product are bound in loose form in heavy iron bobbins which still has to undergo subsequent operations and the product is in semi-finished form. The said PPMFY cannot be marketed in any manner, therefore, fails the test of marketability. Our view is supported by the decision of Hon ble Supreme Court of India in the case of Bata India Ltd. vs CCE, BATA INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI 2010 (4) TMI 58 - SUPREME COURT and also of this Hon ble Tribunal in the case of M/S RISHI BAKERS PVT. LTD., SHRI PRAKASH CHAND TALREJA, DIRECTOR, M/S RAMAKRISHNA BAKERS PVT. LTD., SHRI RAJIV TALREJA, DIRECTOR, M/S SWATI BISCUIT MANUFACTURING CO., SHRI OM PRAKASH SHYAMDASANI, PARTNER VERSUS CCE ST, KANPUR 2015 (4) TMI 893 - CESTAT NEW DELHI . Hence, the said product is not liable for Central Excise duty. Appeal allowed - decided in favor of appellant.
Issues involved:
1. Whether the intermediate product PPMFY is liable for Central Excise duty based on marketability. 2. Whether the product in question is capable of being marketed or is considered an intermediate product exempt from duty. Issue 1: The judgment addressed the issue of whether the intermediate product PPMFY is liable for Central Excise duty based on marketability. The appellant, engaged in manufacturing PPMFY and NWF, argued that the PPMFY is not marketable as it is an integral part of a continuous manufacturing process. The appellant contended that the PPMFY, at the stage it is generated, is not marketable as it undergoes subsequent processes before becoming a final product. The appellant relied on legal precedents such as the case of Bata India Ltd. vs. CCE, which emphasized that a product must be marketable in the condition in which it emerges to be liable for duty. The judgment analyzed the marketability of the PPMFY and concluded that it fails the test of marketability as it cannot be marketed in its current form. The tribunal's decision was supported by legal precedents, and thus, the PPMFY was held not liable for Central Excise duty. Issue 2: The judgment also examined whether the product in question is capable of being marketed or qualifies as an intermediate product exempt from duty. The appellant argued that the PPMFY, alleged to be an intermediate product, is not marketable at the stage it is generated. The tribunal considered the manufacturing process, where the PPMFY undergoes various stages before becoming a final product. Relying on legal precedents like the case of UoI v. Delhi Cloth & General Mill, the tribunal emphasized that for a product to be considered goods liable for duty, it must be something that can ordinarily come to the market to be bought and sold. After evaluating the contentions and perusing the records, the tribunal found that the PPMFY, in its current form, is not marketable and thus does not qualify as a dutiable product. Consequently, the tribunal allowed the appeal filed by the appellant, setting aside the impugned order and granting consequential relief. In conclusion, the judgment thoroughly analyzed the issues related to the liability of the intermediate product PPMFY for Central Excise duty based on marketability. By considering legal precedents and the specific manufacturing process involved, the tribunal ruled in favor of the appellant, holding that the PPMFY was not liable for duty as it did not meet the criteria of marketability in its current form.
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