Case Note & Summary
The dispute arose between a well-known manufacturer of footwear and the Commissioner of Central Excise regarding the classification of unvulcanised sandwiched fabric as excisable goods under the Central Excise Tariff Act, 1985. The Tribunal had previously ruled that the fabric was excisable, leading the manufacturer to appeal to the Supreme Court. The manufacturer argued that the product was not marketable and lacked commercial identity, while the Revenue contended that the product was distinct and capable of being marketed. The Supreme Court analyzed the evidence presented, emphasizing that the burden of proof rested on the Revenue to demonstrate marketability. The court found that the Revenue had not produced sufficient evidence to establish that the product was marketable or had commercial identity. Consequently, the court allowed the appeal, quashing the Tribunal's order and the show cause notices issued to the manufacturer, noting that the product was exempt from duty when used captively for manufacturing exempted footwear. The court directed the Tribunal to expedite the appeal process.
Headnote
A) Central Excise Duty - Classification of Goods - Marketability Requirement - Central Excise Act, 1944, Section 2(d) - The court held that the Revenue failed to prove that the unvulcanised sandwiched fabric was marketable or capable of being marketed, thus it could not be classified as excisable goods. The burden of proof lies with the Revenue to establish marketability for excise duty applicability (Paras 1-21).
Issue of Consideration
Whether unvulcanised sandwiched fabric assembly produced in the Assessee’s factory can be classified as excisable goods under the Central Excise Tariff Act, 1985.
Final Decision
The Supreme Court allowed the appeal, quashed the Tribunal's order and the show cause notices, ruling that the Revenue failed to prove the marketability of the product.
Law Points
- Central Excise Duty
- Marketability
- Excisable Goods
- Burden of Proof
- Captive Consumption
