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TMI Blog2005 (2) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... partment to prove such marketability. In the circumstances, on facts, we hold that the department has failed to prove the test of marketability. That since 1990, when the case of Hindustan Zinc Ltd. ( 1989 (9) TMI 228 - CEGAT, NEW DELHI ) came to be decided, the question of excisability of silver chloride has been cropping up and yet till this day no steps have been taken by the department to go to the market and collect proper evidence of marketability. In most of the matters, we find lethargy and reluctance on the part of the department to collect evidence on marketability and even in cases where market enquiry is made it is made in a perfunctory manner. Consequently, despite the department having good case on classification, we are co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the residue of the treatment whereby sulphates of other materials are filtered out and, therefore, silver chloride can at best be referred to as an intermediate process not amounting to excisable goods; that such a product has no market; that there is no company to buy such a product; that the silver chloride sold at Rs. 9600 per kg. at the relevant time was a different product made from silver; that silver chloride which is sold in the market is sold in the special packing and that the content level of silver and the purity level of the silver chloride sold in the market is different from silver chloride produced in the factory of the assessee which has silver content of only 50% to 53%. According to the assessee, the product which eme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in [1997 (92) E.L.T. 315] and Cadila Laboratories Pvt. Ltd. v. Commissioner of Central Excise, Vadodara reported in [2003 (152) E.L.T. 262]. 6.Applying the above twin tests to the facts of this case, we find from the flow-chart, which has two sides, namely, zinc line and silver line, that at the stage of "Flotation", there is a separation of sulphides of silver and zinc from zinc ferrites, to avoid loss of silver in jarosite waste solids, [See : Hindustan Zinc Ltd. v. Collector of Central Excise reported in 1990 (45) E.L.T. 155 at page 157]. In fact, the flow-chart indicates installation of silver recovery tank for recovery of silver. Further, silver chloride so obtained is essentially a chemically defined compound classifiable und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It is an admitted position that the12. department has (1) made no efforts to ascertain whether any of the intermediate products are available in the market; (2) even if available whether or not products available in the market are the same as that produced by the Appellant; (3) none of the intermediate products manufactured by the Appellants were got analysed by a chemical analyser. It is admitted that the Report of the chemical analyser, relied on, was based only on the write up given by the Appellant. In his cross-examination the chemical analyser admits that there was no facility available in his laboratory to carry out tests to establish the identity of the products. He also admits that, except for 3-4 Diamino Benzophenone there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o so. The burden being on the department it will have to be held that they have not discharged that burden. The order passed only on the basis that these goods "can conceivably be sold" cannot be sustained in the light of the law which has been set out hereinabove." 9.Thus, marketability is essentially a question of fact. In the show cause notice it is stated as follows : "As per market enquiry conducted revealed that silver chloride (75%) was being sold ex-factory @ Rs. 1000/- per 100 Gms. i.e. Rs. 10,000/- per Kg. The silver chloride manufactured by M/s. Hindustan Zinc Ltd. Debari containing 53.7% silver its assessable value of the comparable goods under the provisions of Rule 6(b)(i) of Central Excise (Valuation) Rules, 1975 works ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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