9911796707
TMI Blog2011 (9) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... xempted final product. The assessee's plea that the item in dispute which is prepared by adding sugar 800 grams with 200 ml. per kilo and meagre quantity of citric acid which is heated upto 118 degrees in a tank and cooled and then mixed with other ingredients of biscuits to have sugar dissolved fully is not marketable/not capable of being bought and sold in the market, has been rejected by the authorities and duty demand together with interest and penalty has been confirmed and imposed as a consequence. The finding that the disputed item is marketable is mainly based upon the opinion of the Chief Chemist, CRCL, New Delhi. He has opined thus :- "According to technical literature syrups are concentrated solution of sugars such as sucrose in water or other aqueous liquids. When purified water is used in making solution of sucrose the preparation is known as syrup or simple syrup. In manufacturing syrups the sucrose must be selected carefully and a purified water free foreign substance and clean vessels and containers must be used. Dilute solution of sucrose are prone to growth of molds, yeast and other micro-organisms. In concentratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the question of marketability arises only when, the same has to be marketed as such. The Sugar Syrup in this case is an intermediate product being used for manufacturing the biscuits, which are the exempted finished goods. In the instant case the issue relates to denial of benefit notification no. 67/95-CE, which clearly stipulates that duty on excisable intermediate product has to be discharged in case the finished goods are exempted. The notification does not stipulate any condition of saleability or marketability for allowing or denying the benefit of the said notification. The concept of individual marketability cannot be applied in case of such products because such intermediate products loose their identity when they are used in final products, which are marketed ultimately. Therefore, the marketability of such intermediate products has to be considered in conjunction with the final products. Since, the biscuits are sold, the saleability/marketability of the sugar syrup is established and the same can be deemed to be a marketable/saleability commodity." 7. As regards the case of M/s K.N. Bakers Pvt. Ltd. are concerned, the impugned order on the said issue reads as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the issue regarding the requirement of the marketability which is to be established by the department before a product can be qualified to be an excisable product warranting duty liability. The issue which was raised by the appellants was that the intermediate product in the nature of sugar syrup was not marketable and the same was required to be decided with reference to the said product only and not with reference to the final product, wherein the said product was used as one of the inputs. Merely because of the final product is marketable, it cannot be said that the intermediate product has necessarily to be a marketable product. It would all depend upon the facts of each case. 9. As far as the orders of the original authority are concerned, the said issue has been dealt with in Ambaji Foods (India) P. Ltd. case as under :- "......Now, I take the issue of marketability of the goods in question. The party in their Defence submissions stated that Sugar syrup made of own specification and proportions suitable to use in manufacture of biscuits, are not capable of being bought and sold in market and no other manufacturer would buy their Sugar syrup since contents of the Sugar syr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual sale/marketing is not a factor to decide the capability of marketing of any goods. The various courts have pronounced in their judgments that even if the goods are not sold in the open market, the goods may be capable of being sold in the market. The possibility of the marketability of the product in question cannot be ruled out since the product Sugar syrup has got considerable shelf life and the party has themselves admitted that in hot water at 100?C sugar is added and stirred until it is completely dissolved thereafter citric acid at 104?C, an anti oxidant is mixed to it and then solution is cooled and filtered. Then it is taken for use. The Hon'ble Supreme Court in the case of Gujarat Narmada Valley Fert. Co. Ltd. vs. CCE as reported in 2005 (184) ELT 128 (SC) has held as under: "Actual sale is not necessary but the articles must be capable of being sold in the market or known in the market as goods." On the basis of above decision of the Apex Court it is quite clear that it is immaterial whether the intermediate product is being sold in the open market or not. The main point is to ascertain whether the intermediate products are capable of being sold in the open market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the manner it was required to be decided as rightly pointed out by the learned advocate for the appellants. The authorities will have to analyse the materials on record and thereafter ascertain whether the same reveal the marketability of the product or not and accordingly decide about the duty liability. Since the authorities below have failed to carry out this exercise before confirming the demand, the orders passed by the lower authority are required to be set aside and the matters need to be remanded to the Adjudicating Authority to decide the same afresh and bearing in mind the law laid down by the Apex Court and various other decisions relied upon on behalf of the appellants and quoted hereinabove. In the result, therefore, the appeals succeed and impugned orders are set aside and the matters are remanded, as stated above." 5. Following the ratio of the above order which is applicable on all fours to the facts of the present batch of cases, we set aside the impugned orders and remit the cases for fresh decision to the adjudicating authority to decide afresh on the marketability of the product in dispute, after extending a reasonable opportunity to the assessees of bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
