9911796707
TMI Blog2025 (3) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... was further clarified by the CBEC vide subsequent Circular No. 989/13/2014 dated 07.11.2014, clarifying that in cases where, on the basis of evidence, it is established that such intermediate compounds are capable of being marketed, the same will be excisable, irrespective of whether the compound is actually marketed or otherwise. In the case in hand, the Department has relied upon certain invoices to demonstrate that the aromatic compound is capable of being bought and sold in the open market for a consideration. However, on perusal of sample copy of the invoices relied upon by the Revenue, we find that chemical composition of aromatic compound was not mentioned in those invoices and also the composition of such intermediate product used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative for the Respondent ORDER PER : S. K. MOHANTY Brief facts of the case are that the appellants herein, inter alia, are engaged in the manufacture of Agarbatties, falling under Tariff Item 3707 41 00 of the First Schedule to the Central Excise Tariff Act, 1985. The said goods manufactured by the appellants are chargeable to 'NIL' rate of duty. For manufacture of Agarbatties, the appellants used aromatic compounds captively within the factory. Since the final product i.e. Agarbatties manufactured by the appellants attract 'NIL' rate of duty, the Department had contended that aromatic compounds consumed captively within the factory for manufacture of Agarbatties are liable for payment of Central Excise duty and the benefit provided u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture of Agarbatties. Further, learned Advocate has referred to the Circular dated 22.11.1999 issued by CBEC to state that use of aromatic compounds in appropriate proportion and its quality for manufacture of agarbatties is a trade secret in across the industry and as such, it cannot be said that the said aromatic compound is a readily marketable commodity, capable of being bought and sold in the open market. Further, he has also referred to the subsequent Circular dated 07.11.2014 issued by the CBEC to state that aromatic compounds used by the appellants were not sold either by the appellants or by any other persons and as such, the appellants shall not be liable to pay Central Excise duty on such intermediate product i.e. aromatic com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances faced by the Agarbatti producers, the CBEC in the said Circular dated 22.11.1999 has clarified as under: - "4. Accordingly, it is clarified that the odoriferous compound or Agarbathi dough mixed with odoriferous substances, not being capable of being bought or sold in the market in the normal course of trade, is not an excisable product and no duty is therefore leviable on such compound arising during the course of manufacture of Agarbathi." 6. We find that the said Circular dated 22.11.1999 was further clarified by the CBEC vide subsequent Circular No. 989/13/2014 dated 07.11.2014, clarifying that in cases where, on the basis of evidence, it is established that such intermediate compounds are capable of being marketed, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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