Case Note & Summary
The dispute arose from an appeal filed by the Commissioner of Central Excise, Chandigarh against the order of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) which dismissed appeals regarding the excisability of yeast manufactured by the respondents. The core issue was whether the yeast propagated by the respondents, which had a self-life of 6-8 hours, was subject to excise duty under the Central Excise Tariff Act. The respondents contended that they were not manufacturing yeast but were instead purchasing it and propagating it for the production of potable alcohol. The Assistant Commissioner had issued a show cause notice stating that the respondents were engaged in the manufacture of yeast for captive consumption. The CEGAT upheld the finding that the product was not marketable, relying on precedents that emphasized the necessity of marketability for excisability. The Supreme Court found no merit in the appeal, affirming that the burden of proof lay with the Department to demonstrate that the goods were marketable. Consequently, the court dismissed the appeals with no order as to costs.
Headnote
A) Excise Law - Excisable Goods - Definition of Excisable Goods - Central Excise Tariff Act, 1985, Heading 21.02 - The court examined whether the yeast propagated by the respondents was excisable under the Central Excise Tariff Act. It was held that the intermediate product of yeast mixed with molasses was not marketable, thus not subject to excise duty (Paras 1-3).
Issue of Consideration
Whether the yeast propagated by the respondents was excisable to customs duty under the Central Excise Tariff Act.
Final Decision
The Supreme Court dismissed the appeals, affirming that the intermediate product was not marketable and thus not subject to excise duty.
Law Points
- excisable goods
- marketability
- burden of proof
- manufacturing process
- Central Excise Tariff Act
