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2024 (12) TMI 1296 - AT - Central ExciseExcisability of intermediate goods - Whether sugar syrup having sugar content of 78.2% by weight emerged as an intermediary product, during the course of manufacture of final product viz., Biscuits which is exempted, is excisable and leviable to duty as the benefit of N/N. 67/1995 dated 16.03.1995 would not be available to inputs used in the exempted final product? - extended period of limitation. Excisability of intermediate goods - HELD THAT - In Karnataka Soaps Detergents Ltd. 2017 (10) TMI 660 - SUPREME COURT explaining the scope of marketability their Lordships observed that 'Marketability is thus essentially a question of fact to be decided on the facts of each case. There can be no generalisation. The fact that goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purposes of Section 3 of the Act. It is also not necessary that the goods in question should be generally available in the market. The marketability of articles does not depend neither upon the number of purchasers nor is the market confined to the territorial limits of this country.' Thus, the original authority had sufficiently established the test of marketability. Extended period of limitation - HELD THAT - The sugar syrup manufactured by the appellant, during the course of manufacture of exempted product namely, biscuits, is stable and marketable; hence, liable to duty being an excisable goods - the issue relates to interpretation of law, therefore, invoking of extended period of limitation cannot be sustained and the demand be restricted to the normal period of limitation. Conclusion - Revenue s appeal is partly allowed to the extent of confirming excisability of sugar syrup manufactured at the intermediate stage of manufacture of biscuits, an exempted product, and the demand be limited to the normal period of limitation. No penalty is imposable on the appellant. Appeal is disposed of. ISSUES PRESENTED and CONSIDERED: - Whether sugar syrup emerging as an intermediary product during the manufacture of exempted biscuits is excisable and liable to duty. ISSUE-WISE DETAILED ANALYSIS: Issue: Excisability of sugar syrup Relevant Legal Framework and Precedents: - Central Excise Act, 1944 - Notifications No.67/1995 and No.22/2007 - Relevant case law: Homemade Bakers (India) Ltd. vs. CCE, Pomsy Food Products (P) Ltd. vs. CCE Court's Interpretation and Reasoning: - The Tribunal considered whether the sugar syrup with a sugar content of 78.2% by weight, an intermediary product in biscuit manufacturing, was excisable. - The Revenue contended that the sugar syrup was marketable and dutiable based on the original authority's findings and the capability of being bought and sold. - Citing precedents, the Tribunal emphasized that marketability, not actual marketing, is crucial for excisability. The sugar syrup's stability and sugar content supported its marketability. Key Evidence and Findings: - Chemical analysis showed the sugar content in the syrup to be 78.2% by weight. - Reference to Board Circular and test reports supported the marketability of sugar syrup with high sugar content. Application of Law to Facts: - The Tribunal found that the sugar syrup was stable and marketable, satisfying the test of excisability. - The demand for duty was limited to the normal period of limitation due to the issue relating to the interpretation of the law. Conclusions: - The sugar syrup manufactured during biscuit production was deemed excisable and liable to duty, with the demand restricted to the normal limitation period. - No penalty was imposed on the appellant. SIGNIFICANT HOLDINGS: - The Tribunal confirmed the excisability of sugar syrup as an intermediary product in biscuit manufacturing. - The demand for duty was limited to the normal period of limitation, and no penalty was imposed on the appellant.
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