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TMI Blog1994 (6) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under Chapter Heading No. 2807 of CET, 1985. Two Demand-cum-Show Cause Notices were issued to them to show cause as to why the duty amounting to Rs. 1,04,514 be not recovered from them on the ground that they did not pay Central Excise duty on the intermediate product, namely, Sulphuric Acid used in their final product Oleum, which was cleared and removed without payment of duty to KFTZ Kandla and 100% export oriented units during the period from April 1991 to September, 1991 and October, 1991 to November, 1991. The appellants contested the Show Cause Notices inter alia on the ground that the subject intermediate product, namely, Sulphuric Acid is not an excisable goods. However, the Assistant Collector of Central Excise Customs, Udai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle falls within the Schedule it would not be dutiable under excise law if the said article is not goods known to the market. Marketability, is therefore, an essential ingredient in order to be dutiable under the Schedule to the Central Excise Tariif Act, 1985 and further that the burden to prove that the subject goods are dutiable is on the Department. Alternatively, it was also submitted that the authorities below erred in denying the benefit of exemption Notification No. 217/86-C.E., dated 2-4-1986 on the ground that the benefit of said Notification is not available to the appellants as the finished/final product, that is to say, Oleum has been cleared without payment of central excise duty. In reply, Shri S.K. Sharma, learned JDR, sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that first Sulphuric Acid is formed and the said Sulphuric Acid is charged with more Sulphur Trioxide (SO3) and different strength of Oleum is formed. Thus, Sulphuric Acid is the intermediate product before Oleum is produced and is marketable. While affirming the aforesaid finding of the Assistant Collector, the Collector (Appeals) has also held that in the instant case, Sulphuric Acid is an intermediate product before Oleum is produced and it is also marketable. It may be true that the appellants may not be marketing the Sulphuric Acid in this case but that does not mean that the Sulphuric Acid is not goods or the same does not have marketability. These findings of the authorities below, in our considered opinion, are in line with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des that Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final pruducts (other than those cleared either to a unit in a Free Trade Zone or to a 100% Export Oriented Unit), which are exempt from the whole of the duty of excise leviable thereon or are chargeable to Nil" rate of duty". In the instant case duty has been demanded on the clearance of 120.70 M.T. of Oleum 65% without payment of Central Excise Duty to KFTZ Kandla and 100% export oriented unit for the period from 10/91 to 11/91. Therefore, the findings of the authorities below that Sulphuric Acid in the instant case used captively in the manufacture of the final product, namely, Oleum was not entitled for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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