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TMI Blog1995 (3) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Therefore, the Supdt. called for the process of manufacture of the adhesives. The details furnished by the assessee are as follows : (i) Casein based adhesives : Casein is a by-product of milk obtained from suppliers of Gujarat. This is mixed with cold water and lime powder and casein based glue is manufactured. (ii) Starch based glue : Starch is a product made out of TAPIOCA and bought by them in open market. Starch is mixed with hot water, hydrochloric Acid and lime powder. 3. Therefore, the department by their show-cause notice dated 10th Aug. 1987 demanded from the assessee as to why these two products should not be classified under Chapter Heading 3501.00 and 3505.90 respectively. It was also stated in the show-cause notice that as the final products were articles of paper, being classifiable under Heading 4818.19 and cleared with `Nil rate of duty; hence the adhesives were not entitled to the benefit of the Notification Nos. 177/87 and 217/86 both as amended. A demand of Rs. 29,296.15 for the clearances made during the period 10-2-1987 to 30-6-1987 was also demanded under Section 11A of the Central Excises Salt Act, 1944. Another show-cause notice dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it does not have a shelf life. In this context, he has submitted that it not being a Casein, it does not fall under Chapter 35 and therefore, the burden to show it had marketability and that they are `goods is on the department and not on the assessee. He submitted that merely because the item is said to be covered by a tariff entry that by itself cannot be a ground to hold the product to be classifiable and dutiable unless the question of marketability has been established. In this context, the Apex Court has already laid down the law that mere mentioning in the Schedule will not make the products dutiable and in this context, the ld. Counsel has relied on the following rulings : 1. Sandoz India Ltd. v. Union of India Others - 1980 (6) E.L.T. 696 (Bom.) 2. India Vegetable Products Ltd. v. Union of India Others - 1980 (6) E.L.T. 704 (Bom.) 3. Union Carbide India Ltd. v. Union of India Others - 1986 (24) E.L.T. 169 (S.C.) 4. Bhor Industries Ltd. v. Collector of Central Excise - 1989 (40) E.L.T. 280 (S.C.) 5. Collector of Central Excise v. Ambalal Sarabhai Enterprises - 1989 (43) E.L.T. 214 (S.C.) 6. Hindustan Tools Forgings v. Collector of Central Excise - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta High Court. This ruling is clearly distinguishable for the reason that in the first instance this ruling has not taken into consideration the various judgments delivered by the Hon ble Supreme Court as noted herein and furthermore that even on facts, the item was being utilised by the assessee themselves and therefore, in that context, the Hon ble High Court had held that the plea that the item does not have market, is not acceptable. This view is also confirmed by the Supreme Court in the case of A.P. State Electricity Board, wherein the Supreme Court found that the marketability does not depend upon the number of purchasers nor is the market confined to territorial limits of India. This is not a situation in the present case. The appellants have stated that their product is not casein as classifiable under Heading 35.01 and it does not have a shelf life as it is not marketable. Therefore, the burden was on the revenue to show that the product is casein and it is known in the market and that it has got shelf life. This initial burden has not been discharged by the revenue. In case if the revenue had placed some material then the burden shifts on the assessee and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants are justified in pleading that there was denial of principles of natural justice. At the same time I note that the Chemical Examiner s Report has also not been filed before us and therefore the question basically involved in this case relating to shelf life cannot be finalised. There is no other material before us to be able to record a specific finding. 15. It was however, the primary duty of the adjudicating authorities below to look into these aspects but neither the A.C. nor the Collector (Appeals) have reproduced the Chemical Examiner s Report; Nor they have given a copy to the other side. 16. I therefore, set aside the impugned orders on the ground of violation of principles of natural justice and remand the matter to the A.C. for de novo consideration in accordance with law with the direction that he should immediately supply a copy of the Chemical Examiner s Report and if necessary refer the matter again to Chemical Examiner for his observations regarding shelf life and grant a personal hearing to the appellant before deciding the matter. Dated : 21-11-1994 Sd/- S.K. Bhatnagar (Vice President) 17. In view of difference of opinion between Hon ble Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Collector of Central Excise - 1989 (40) E.L.T. 280 (SC) as well as in the case of Collector of Central Excise v. Ambalal Sarabhai Enterprises, reported in 1989 (43) E.L.T. 214 (S.C.) and these two decisions were not taken note of by the Calcutta High Court in the case of Union of India v. Bata India Ltd., [1993 (68) E.L.T. (756)] while deciding the issue that burden lies on the party to prove the marketability. Hence, burden cannot be shifted on the assessee to prove that item was not a marketable commodity. He said that Hon ble Supreme Court has been consistently taking the view that marketability of a product is a pre-requisite of `sine qua non for levy of duty and referred to the latest decision of the Supreme Court in the case of Indian Cable Co. Ltd. v. Collector of Central Excise, Calcutta Others, reported in 1994 (55) ECR 20 (S.C.) and he also referred to the decision of the Tribunal in the case of Apar Limited v. Collector of Central Excise, Ahme- dabad, reported in 1994 (54) ECR 616 (Tribunal) wherein it was held that onus is on the Department to prove that the goods are marketable observing that it was incumbent upon the department to establish on the basis of prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case since beginning the party has taken the plea that goods were neither marketed nor marketable as such. 21. I have gone through the respective opinions given by my learned Brothers and have considered the submissions made by both sides with reference to the point of difference. There is no dispute with the proposition that product is excisable subject to marketability but the point to be considered in this case is whether burden of proving marketability lies on the Department or on the Assessee as it was rightly pointed out by the Departmental Representative. In the case of Bhor Industries, Supreme Court observed that simply because a certain article falls within the Schedule, it would not be dutiable under Excise Law if the said article is not goods known to the market. It was further observed that it would be necessary to find out whether the goods in dispute are articles known in the market as separate, distinct and identifiable commodities and whether any tariff duty should be levied merely following the description of the article in the Schedule without finding out whether those goods are things which can ordinarily come to the market to be bought and sold. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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