Case Note & Summary
This case involved a statutory appeal filed by M/s. Cipla Ltd against the order of the Customs, Excise and Gold (Control) Appellate Tribunal, which had held that Benzyl Methyl Salicylate (BMS) was marketable and thus liable to excise duty. The appellant, engaged in manufacturing medicines and organic chemicals, contended that BMS was not an excisable item as it was neither sold nor purchased by any party. The Revenue issued show cause notices asserting that BMS was liable to duty under specific sub-headings of the Central Excise Tariff Act. The Assistant Collector initially ruled that BMS was excisable, but this decision was quashed by the High Court, which directed a fresh examination of the issue. After further proceedings, the Assistant Collector concluded that BMS was not marketable based on the lack of evidence from the Revenue. However, the Commissioner (Appeals) reversed this finding, stating that BMS was marketable due to its transportation and packaging. The Tribunal faced a split decision, with the majority siding with the Commissioner. The Supreme Court analyzed the evidence and reiterated that the burden of proof lies with the Revenue to establish marketability. The court found that mere classification as an intermediate product did not suffice to prove marketability. Ultimately, the court accepted the appeal, set aside the Tribunal's order, and ruled that BMS was not marketable, thus not liable for excise duty.
Headnote
A) Central Excise - Marketability - Burden of Proof - Central Excise Act, 1944, Section 35L(b) - The court held that the Revenue failed to prove the marketability of BMS, which is essential for it to be liable for excise duty. The absence of evidence regarding buying or selling of BMS led to the conclusion that it was not marketable, thus the appeal was accepted and the Tribunal's order was set aside (Paras 5-6).
Issue of Consideration
Whether Benzyl Methyl Salicylate (BMS) is marketable and liable to excise duty.
Final Decision
The Supreme Court accepted the appeal, set aside the Tribunal's order, and ruled that BMS was not marketable, thus not liable for excise duty.
Law Points
- Marketability
- Excise Duty
- Burden of Proof
- Intermediate Product
- Central Excise Act
- 1944
