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2017 (6) TMI 885 - CESTAT ALLAHABADArea Based Exemption - N/N. 50/2003-CE - classification of the intermediate product namely- Phenol Formaldehyde Resin, Urea Formaldehyde Reason, and Melamine Formaldehyde Resin, which is 100% for captive purposes for manufacture of decorative plywood, particle board, etc. - The Department was of the view that these resins would not be eligible for captive consumption exemption under N/N. 67/95-CE, and since the same are not covered by the Hill area exemption under N/N. 50/2003-CE, the same would be chargeable to duty - whether the intermediate product-resin is marketable or capable of being marketed or not? - Held that: - The test of marketability is that the product which is made liable to duty must be marketable in the condition in which it emerges. The word ‘Marketable’ means saleable or suitable for sale. It need not in fact be marketed - The characteristics of which are same and use or degree of quality of product may differ, but the product is known by the same and unique name in the market and has a commercial identity - learned Commissioner have erred in holding that the appellant's goods are also capable of being bought and sold without any chemical composition comparison along with competitive shelf life study. Whether the resins in question are classifiable under heading 3909 or 3506? - Held that: - Once it is established that paper is quoted with certain resols which have the essential characteristics of meriting classification under chapter 39 and which according to Note-01 of chapter 39 are to be called plastics. We find that learned Commissioner erred in relying on the said ruling in absence of comparison of chemical composition - as per HSN explanatory notes to chapter 39, glue manufactured by appellant for use as adhesive is outside the preview of chapter 39. Admittedly, the glue in question is curried glue to which hardner and other substances are added and therefore, glue manufactured by the appellant is not covered by clause 1 to note 6 of chapter 39, such glue being not in the form of block, lump or powder - the impugned order is bad and fit to be set aside. Extended period of limitation - penalty - Held that: - Since the matter is highly debatable and the Clarification issued by Ministry is in Appellant’s favor, hence extended period of limitation cannot be invoked and consequently penalty also cannot be imposed. Appeal allowed - decided in favor of appellant.
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