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TMI Blog2004 (2) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Respondents manufacture Paper and Paper Board and avail of Modvat Credit of the duty paid on the inputs used in the manufacture of their final products; that an intermediate product, namely, Bleach Liquor, falling under sub-heading No. 2828.90 of the Schedule to the Central Excise Tariff Act emerges during the manufacture of paper which is used in the continuous process of manufacture of paper; that the Commissioner (Appeals) in different Orders-in-Appeal has held that the bleach liquor is not marketable as it has a very short shelf life and it is not possible to take it out from the continuous process and market it; that the Department has not produced any evidence that the impugned product is marketable and that an article cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product is not capable of being marketed. He relied upon the decision in the case of Plasmac Machine Mfg. Co. (P) Ltd. v. C.C.E., 1991 (51) E.L.T. 161 (S.C.) wherein the Supreme Court has held that for articles to be goods, these must be known in the market as such or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary, use in the captive consumption is not determinative but the article must be capable of being sold in the market or known in the market as goods. Reliance has also been placed on the decision in the case of Hindustan Polymers v. C.C.E., 1989 (43) E.L.T. 165 (S.C.) wherein the Supreme Court has held that Manufacture under the Excise Law is the process or activity which brings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not being marketable. The fact that it was marketable is proved by its utility for the purpose to which it was put. Finally, he relied upon the decision in the case of A.P. State Electricity Board v. C.C.E., Hyderabad, 1994 (70) E.L.T. 3 (S.C.) wherein the Apex Court has laid down the test of marketability and has held as under : The marketability is thus essentially a question of fact to be decided in the facts of each case. There can be no generalisation. The fact that the 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. It is not also necessary that the goods in question should be generally available in the market. Even if the goods are available f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the various judgments of the Supreme Court highlight the fact that no duty is demandable unless the goods are proved to be marketable and the burden to prove that fact is upon the Department - Moti Laminates P. Ltd. v. C.C.E., 1995 (76) E.L.T. 241 (S.C.) and C.C.E. v. Ambalal Sarabhai Enterprises, 1989 (43) E.L.T. 214 (S.C.); that no material evidence has been brought on record to prove that the impugned goods is a marketable product; that the mixture prepared by them has a very short shelf life and it remains unstable; that it is to be prepared fresh and used promptly in the continuous process of manufacture before it loses its property; that the Explanatory Notes of H.S.N. is not with regard to impugned product. He relied upon the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bought and sold. Therefore, any goods to attract excise duty must satisfy the test of marketability. The Supreme Court emphasised this aspect in the case of South Bihar Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J336) by holding that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market. The Supreme Court has held in the case of Moti Laminates Ltd., supra that any goods mentioned in the Tariff Schedule do not attract duty unless it is marketable or capable of being marketed. The Supreme Court observed as under : The submission of the learned Counsel for the Department, therefore, that merely it is one of the items mentioned under Item 15A it was excisab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ochlorite in Heading 28.90 of H.S.N. This averment does not advance the case of the Revenue in view of the specific finding of the lower Appellate Authority that the product is unstable having short life and prepared afresh and used promptly in the continuous process of manufacturing. The Supreme Court has also held in Moti Laminates Ltd. that mere fact that the product is mentioned in the Tariff does not make it exigible to excise duty. To be excisable, the product must pass the basic and primary test of marketability. In Appeal No. E/3267/2003-NB(C), the Adjudicating Authority has held the impugned product to be marketable. However, even therein the ground for treating the product marketable is the entry in H.S.N. only. No other reasoning ..... X X X X Extracts X X X X X X X X Extracts X X X X
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