2015 (6) TMI 374 - AT - Central Excise

Manufacture - Marketability of product - Printed material - printing various forms such as hospital form, leave application form, reservations form application form for passes, application form for privileged tickets and similar various forms for different purposes - Held that - Revenue has not discharged the burden of proof that the product in question is marketable or otherwise and from the nature of the product coupled with the fact that printed material printed in the appellants printing press is not for general use in the market but for their own use, the goods clearly not marketable. We are fully in agreement with the Ld. Sr. Counsel that in terms of definition of excisable goods and explanation thereto the goods should be capable of being bought and sold and that too for consideration. In the present case goods being printed with name and details of Central Railway is not capable of being bought and sold for consideration hence the same is not marketable goods. In view of our above discussion, we are of the considered view that product in question are not dutiable on both the counts of classification as well as marketability. We therefore set aside the impugned orders . Revenue has not discharged the burden of proof that the product in question is marketable or otherwise and from the nature of the product coupled with the fact that printed material printed in the appellants printing press is not for general use in the market but for their own use, the goods clearly not marketable. In terms of definition of excisable goods and explanation thereto the goods should be capable of being bought and sold and that too for consideration. In the present case goods being printed with name and details of Central Railway is not capable of being bought and sold for consideration hence the same is not marketable goods. Product in question are not dutiable on both the counts of classification as well as marketability. We therefore set aside the impugned orders - Decided in favour of assessee.

Issues Involved:
1. Classification of goods under the Central Excise Tariff Act.
2. Marketability of the goods produced by the Central Railway printing press.
3. Burden of proof regarding marketability.

Detailed Analysis:

1. Classification of Goods:
The primary issue was whether the goods produced by the Central Railway printing press, such as various forms and printed materials, should be classified under Chapter 4820 or Chapter 4901 of the Central Excise Tariff Act. The appellant argued that their products, being printed materials used for internal purposes, should be classified under Chapter 4901, which attracts a NIL rate of duty. The adjudicating authority, however, classified these goods under Chapter 4820, which includes registers, account books, and other stationery items, thereby making them liable for excise duty.

The Tribunal examined the nature of the goods and found that the forms and printed materials produced by the Central Railway printing press were not general stationery items but specific forms used internally by the railway. These forms contained detailed printed information with some blank columns for filling in by manuscript or typescript. Based on this, the Tribunal concluded that the products were correctly classifiable under Chapter 4901 as products of the printing industry, not under Chapter 4820.

2. Marketability of the Goods:
The second issue was whether the goods produced by the Central Railway printing press were marketable. The appellant contended that the goods were not marketable as they were specifically printed for internal use by the Central Railway and could not be used by any other entity. The adjudicating authority, however, held that the goods were commercially known and capable of being bought and sold, thus marketable.

The Tribunal referred to several judgments, including those of the Supreme Court, which established that for goods to be excisable, they must be marketable or capable of being marketed. The Tribunal found that the printed materials in question were specific to the Central Railway and could not be used by any other entity, thus not marketable. The Tribunal emphasized that the burden of proof regarding marketability lies with the Revenue, which had not been discharged in this case.

3. Burden of Proof Regarding Marketability:
The appellant argued that the burden of proving the marketability of the goods rested with the Revenue. The Tribunal agreed, citing various judgments that consistently held that the burden of proof regarding marketability is on the department and not on the assessee. The Tribunal noted that the Revenue had not provided any evidence to prove that the goods were marketable.

The Tribunal referred to several judgments, including Gujarat Narmada Valley Fert. Co. Ltd. Vs. Collector of Ex. & Cus., Commissioner of C.Ex. Indore Vs. Virdi Brothers, and Collector of Central Excise, Patna Vs. Tata Iron & Steel Co. Ltd., which emphasized that marketability must be proven by the Revenue. In the absence of such proof, the goods could not be considered marketable.

Conclusion:
The Tribunal concluded that the goods produced by the Central Railway printing press were correctly classifiable under Chapter 4901 and not liable for excise duty. Additionally, the Tribunal held that the goods were not marketable as they were specific to the Central Railway and could not be used by any other entity. The burden of proving marketability had not been discharged by the Revenue. Consequently, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief, if any, in accordance with the law.

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