Case Note & Summary
The dispute involved the Collector of Central Excise and United Phosphorus Ltd. regarding the liability of certain intermediate products to excise duty. The respondents manufactured insecticides and during this process, three intermediate products emerged. The Collector of Central Excise adjudicated that these products were liable for excise duty, but the Collector (Appeals) exonerated them. The Revenue's appeals against this decision were dismissed by the CEGAT, prompting the Revenue to approach the Supreme Court. The court noted that excise duty applies to goods that are marketable and known in the market. It emphasized that intermediate products, even if listed as excisable, must meet the marketability test to be subject to duty. The court referenced previous judgments, establishing that the burden of proof for marketability lies with the department. The findings of the Collector (Appeals) were upheld, concluding that the intermediate products were not marketable and thus not liable for excise duty. The Supreme Court dismissed the appeals without costs.
Headnote
A) Excise Duty - Marketability of Goods - Test for Excise Duty Liability - Central Excise Act, 1944, Sections Not mentioned - The court reiterated that excise duty is applicable only if the goods are marketable and known in common parlance. The intermediate products in question were not found to be marketable as they were not capable of being sold in the market, leading to the dismissal of the Revenue's appeals. Held that the burden of proof lies with the department to establish marketability (Paras 1-2).
Issue of Consideration
Whether the intermediate products are liable to excise duty based on marketability.
Final Decision
The Supreme Court dismissed the appeals filed by the Revenue, affirming the findings of the Collector (Appeals) that the intermediate products were not marketable and thus not liable for excise duty.
Law Points
- Excise duty
- marketability
- intermediate products
- taxable event
- goods definition
