2017 (7) TMI 235 - AT - Central Excise

Intermediate product namely sugar syrup - demand on the ground that N/N. 67/95-CE dated 16.03.1995 is not applicable when the final product is exempted from payment of excise duty - whether sugar syrup made by the appellant for captive use in the manufacture of exempted biscuit is chargeable to central excise duty under sub-heading 17029090? - Held that - CBEC Circular dated 7.11.1994 relied upon by the lower authorities has been issued in respect of sugar syrup produced in the manufacture of aerated water and ayurvedic medicines. Hence, the same cannot be applied to the sugar syrup being produced for the biscuits without establishing that the two products are identical - the decision in the case of Rishi Beckery vs. CCE Kerala 2015 (4) TMI 893 - CESTAT NEW DELHI - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of sugar syrup for captive use in the manufacture of exempted biscuits under central excise duty.

Analysis:
The case involved the classification of sugar syrup produced by the appellants for captive use in the manufacture of exempted biscuits under central excise duty. The appellants, engaged in biscuit manufacturing as franchisees, were initially paying duty on the sugar syrup but stopped from July 2008. The issue was whether the sugar syrup fell under sub-heading 17029090 for excise duty. The lower authorities concluded the sugar content was over 80% without a chemical test. The appellant argued marketability and classification under Notification No.67/95-CE. The Revenue contended the sugar syrup was marketable with a shelf life. The Tribunal found that without a chemical test, classification under 17029090 was unsustainable. The CBEC Circular on sugar syrup for aerated water couldn't be directly applied. The Tribunal cited a previous case where classification required 50% fructose content, which wasn't proven. The marketability of the goods was also questioned, as similarity to other products wasn't established. The Tribunal held the order unsustainable, following precedent, and allowed the appeal. The decision was in line with a previous case and set aside the Commissioner (Appeals) order.

In conclusion, the judgment revolved around the classification of sugar syrup used in biscuit manufacturing under central excise duty. The Tribunal emphasized the importance of chemical testing for classification and establishing marketability. The decision highlighted the need for evidence to support classification and marketability claims. The judgment provided a detailed analysis of the legal principles involved in determining the excise duty liability on the sugar syrup used in the manufacturing process.