Emphasizing that “marketability” is an essential ingredient for rendering any article as dutiable under the Schedule to the Central Excise Tariff Act, 1985, the CESTAT Chennai clarified that since ‘Sugar invert syrup’, which was captively consumed in biscuit manufacture, is not separately marketable, no demand for duty and penalty could be sustained under the Excise Act.
The Coram comprising Ajayan T V (Judicial Member) and Ajit Kumar (Technical Member) observed that the Department has not discharged its burden of showing that goods are marketable and hence the ‘sugar invert syrup’ manufactured by the appellant is not exigible to Central Excise duty.
The Coram referred to the submission of the appellant that sugar syrup is not marketable, as no evidence was produced by the Department regarding shelf life or market demand, and the issue stood covered in their own earlier case where the Tribunal had held that sugar syrup is not dutiable.
Reference was made to the decision of the Apex Court in the case of Bhor Industries Ltd. vs. Collector of Central Excise [1989 (40) E.L.T. 280 (S.C.)], which has held that simply because certain article falls within the Central Excise Tariff Act (CETA), it would not be dutiable under excise law if the said article is not “goods” known to the market.
Briefly, in this case, the appellant is a manufacturer of biscuits on a job work basis during which ‘sugar invert syrup’ is manufactured and captively consumed. As biscuits were exempt under Notification No.3/2007-CE, the Department demanded duty of Rs. 4.97 lacs with interest & penalty under Rule 27, alleging that sugar syrup is dutiable.
Appearances:
Advocate Mayur Jain, for the Appellant/ Taxpayer
Advocate M Selvakumar, for the Respondent/ Revenue
