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TMI Blog2022 (2) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... nts is thus partially allowed in above terms and the impugned Order-in-Original is modified to the above extent." 1.2 The Assistant Commissioner vide his order referred to in above para held as follows: "ORDER 15.1 I confirm the demand of Rs. 4,10,892/- [Rupees Four Lakhs Ten Thousand Eight Hundred and Ninety Two only], (.e. Basic Excise Duty of Rs. 3,96,923.87/-+ Ed. Cess of Rs. 7,978.45/+S & H. E. Cess of Rs. 3,989.22/-), as raised in the Show Cause Demand Notice issued under F.No. V(17)4-08/Ad/11-12/1799, dated 03.06.2011, on M/s. Venugopal Foods Pvt. Ltd., Plot No.J- 8, Addl. MIDC, Satara-415004, under the provisions of Section 11A(2) of the Central Excise Act, 1944. I further order the assessee to pay the same immediately. 15.2 I confirm the interest liability at appropriate rate, on the confirmed duty liability of Rs. 4,10,892/-, calculated from the date the duty was actually due, till its payment, on M/s. Venugopal Foods Pvt. Ltd., Plot No.J-8, Addl. MIDC, Satara- 415004, under the provisions of Section 11AB of the Central Excise Act, 1944. I further order the assessee to pay the same im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn case in their favour vide order No. A/88160/2018 dated 20.12.2018 and A/85151-85152/2019 dated 22.01.2019. Hence, as the issue is no longer res integra, the appeal should be allowed. 3.3 Learned AR reiterates the findings in the impugned order and submits that - * Admittedly the sugar syrup manufactured by the appellants using 80% sugar and 20% water and additive like citric acid is added to it as preservative. * Board has issued circular dated 03.07.1996 clarifying that according to IS: 4935-1968 synthetic syrups may be prepared with or without addition of citric acid to sugar syrups and flavouring essences. The total soluble solid content in synthetic syrup shall be not less than 65% by weight. The only additives that shall be used in synthetic syrups are citric acid and permitted colours. * Since the total soluble solid content in the present case is more than 65% (80%), the sugar syrups prepared by the appellants are rightly leviable to excise duty. * On the issue of marketability, he submits referring to the opinion dated 09.07.2009 given by Pankaj Traders, dated 11.07.2009 of Ashok Age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods' till July 2008 and had discontinued payment of duty on advice from their client, M/s Parle Products Pvt Ltd. For the sweetening of 'biscuits', the addition of 'sugar syrup' is a necessity and is, invariably, produced within the factory by dissolving 'table sugar' in water using heat. This process, known as hydrolysis, converts 'table sugar' into 'invert sugar' and transforms the 'sucrose' in the former into 'fructose' and 'glucose' of equal proportion. Though this hydrolysis can be achieved by application of heat, the addition of 'citric acid' speeds up the process of conversion. 'Invert sugar' has shelf-life, is marketable and is an excisable good. The contention of the appellant that 'sugar syrup' produced by them does not meet these requirements, owing to less than adequate 'fructose' content, is backed by a test report which is not controverted by the lower authorities. 6. The lower authorities have discounted the relevance of 'fructose' content by a semantic analysis of the description in heading no. 170290 of First Schedule to Central Excise Tariff Act, 1985 without any attempt to comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are classifiable under sub-heading 17029090 is not sustainable. We also find that the CBEC Circular dated 7.11.1994 relied upon by the lower authorities has been issued in respect of sugar syrup produced in the manufacture of aerated water and ayurvedic medicines. Hence, the same cannot be applied to the sugar syrup being produced for the biscuits without establishing that the two products are identical. We also find that issue in this appeal is squarely covered by the judgment of the Tribunal in the case of Rishi Bakers Pvt. Ltd. (supra), wherein the Tribunal has held as under: "8. Next comes the question of classification. The Department has classified the product, in question, under sub-heading 1702 90 90. Sub-heading 1702 90 90 comes under the 6 digit sub-heading 1702 90 which covers "other sugars including invert sugar and sugar syrup blends containing in the dry stage 50% by weight of fructose". The goods, in question, are sought to be classified under 1702 90 90 as "sugar syrup blends containing in dry stage, 50% by weight of fructose". In our view for classification as "sugar syrup blend" i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. CCE, New Delhi (supra) has held that the test of marketability is whether product is marketable in condition in which it emerges. In this regard the marketability of the goods produced by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that the "invert sugar syrup" being manufactured by M/s. Dhampur Speciality Sugars Ltd. is being sold to M/s. Britannia Industries, M/s. J.B. Mangaram Food Industries and M/s. ITC Ltd. In our view this basis of holding that the goods, in question, are marketable is absolutely wrong, as it has been presumed that the sugar syrup being made by the appellants is identical to the "invert sugar syrup" being made by M/s. Dhampur Speciality Sugars Ltd. for which there is no basis. Chemically, invert sugar is obtained by Hydrolysis of cane sugar (sucrose, a disaccharide with specific rotation of + ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of goods alone is not enough. In order to attract the levy of excise duty, the goods should not only be manufactured, i.e., come into existence, but also should be articles or products that are known to the market and must be capable of being brought and sold. Some emphasis has to be laid on the use of the word capable as actual sale of the product or article is not essential and required. This has been settled in a number of authorities of this Court and no longer res integra. There cannot be any doubt that intermediate products, even if captively consumed and not actually sold, may be liable to levy of excise duty if they satisfy the test of both manufacture and marketability. The aforesaid legal principle has been laid down by this Court in the judgments in Hindustan Zinc Ltd. v. Commissioner of Central Excise, Jaipur, reported in 2005 (181) E.L.T. 170 (S.C.), Union of India v. Delhi Cloth & General Mills Co. Ltd., reported in 1997 (92) E.L.T. 315 (S.C.), Cadila Laboratories Pvt. Ltd. v. Commissioner, reported in 2003 (152) E.L.T. 262 (S.C.). In the decision in Hindustan Zinc Ltd. (supra),&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to market the product in issue before the Court in that case." In our view this case also does not advance the case for revenue, as in present case no evidence has been adduced by revenue that the sugar syrup in question is known in the market as such and can be marketed. Hon'ble Supreme Court has clearly laid down that marketability is question of fact and needs to be examined in facts of each case and for that shelf life cannot be relevant criteria. Contrary to revenue not having adduced any evidence to establish the marketability of "sugar syrup", arising in the course of manufacture of biscuits, appellants have produced a substantial number of certificates earlier referred by us while recording the submissions made during the course of argument from the persons dealing in similar goods who clearly stated that "sugar syrup" of this type is never bought and sold in the market. In view of the above, and in absence of evidence to establish the marketability of sugar syrup, we are not inclined to accept the argument advanced by the revenue on the basis of this decision of Hon'ble Apex Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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