2019 (1) TMI 1163 - AT - Central Excise

Manufacture - Printing of the forms etc. - case of Revenue is that printing of forms, though were fully exempted from payment of duty in terms of N/N. 10/2013 dated 01.03.2003 till 28.02.2006, but by Finance Bill, 2006 the effective rate @ 8% ad valorem was imposed vide N/N. 10/2006 CE dated 01.03.2006 - Held that - The Commissioner (Appeals) has observed that even though the goods were not sold as such, they were sent/transferred to their own other offices, outside the factory. It is further observed that the goods may not necessarily be sold, but at the same time, they can be marketable. There is no material on record that the printed stationary of the appellant is marketable. It is well settled law that Revenue has to discharge the burden of test of marketability of the product - In the present case, as the Revenue failed to discharge the burden of test of marketability, the demand of duty cannot be sustained. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Central Excise Tariff Act, 1985; Duty liability on printing of forms; Marketability of printed stationary.

Classification of Goods:
The case involved the classification of goods under Heading No. 4820.10 of the Central Excise Tariff Act, 1985, covering various articles like registers, account books, and letter pads. The goods were exempted until 01.03.2006, after which duty was levied at 8% ad valorem. The appellant argued that since the stationary items were solely for internal use by the Municipal Corporation and not for sale in the open market, they were not excisable. The appellant relied on a Tribunal decision supporting this stance.

Duty Liability on Printing of Forms:
The appellant was engaged in printing various registers, forms, and letters for internal use within the Municipal Corporation. The dispute arose when duty was demanded for the period 01.03.2006 to 31.03.2008 based on a change in duty rates. The Commissioner (Appeals) observed that while the goods were not sold externally, they were transferred to other offices outside the factory. The key contention was the marketability of the printed stationary. The Tribunal held that since the Revenue failed to prove marketability and discharge the burden of test of marketability, the demand of duty could not be upheld.

Marketability of Printed Stationary:
The crucial aspect of the case revolved around the marketability of the printed stationary. The Tribunal emphasized that the Revenue had to establish the marketability of the product to sustain the duty demand. The Tribunal referred to a previous judgment highlighting that if the Revenue did not prove marketability, the claim that the goods were not marketable must be accepted. As there was no evidence that the printed stationary was marketable, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the burden of proving marketability rested with the Revenue, which was not discharged in this case. The decision highlighted the importance of establishing marketability to determine the excisability of goods, ultimately leading to the appeal being allowed in favor of the appellant.