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TMI Blog2010 (8) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... 07. On the ground that the final product is exempt from payment of duty, in relation to the Sugar Syrup, being the intermediate product, could not have claimed the benefit of Notification No.67/1995-CE dated 16th March 1995, the show cause notices came to be issued for recovery of the duty in relation to the Ambaji Foods (India) Pvt. Ltd. for the period from October 2008 to July 2009 and in case of K.N. Bakers Pvt. Ltd. from July 2008 to March 2009. The proceedings were contested by the appellants, however, by the impugned orders the demand was confirmed as stated in the orders and hence the present appeals. 3. Though the impugned orders are sought to be challenged on various grounds, it is not necessary to refer to all those grounds and suffice to refer to only one ground namely failure on the part of the authorities below to consider the most relevant issue relating to the question of marketability of the Sugar Syrup before confirming the demand against the appellants. 4. The learned advocate for the appellants drawing our attention to the Circular No.780/13/2004-CX dated 12th March 2004 and placing the reliance in the decision of the Hon'ble Supreme Court in the matter of Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no relevancy. I find that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the Commissioner (Appeals) to consider 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 wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard it is seen that there is difference between actual sale and marketability of the product. Actual 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 basts of above decision of the Apex Court it is quite clear that it is immaterial whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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