TMI Blog1996 (7) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... de India Ltd. - 1987 (24) E.L.T. 169 (SC) held that the product Milk Crumb was not only intermediary products but also could not be called `goods inasmuch as they could not be bought and sold in the market. Against this decision the present appeal is filed. 2. The case before us was presented for Revenue by Shri A.K. Madan, SDR. Respondents were represented by Shri M.P. Baxi, Advocate and Ms. Tasneem Ahmadi, Advocate. 3. For better appreciation of the merit of the case, it is necessary to define the product Milk Crumb. The product has been described in the Bombay High Court judgment dated 16-8-1984 as follows :- The petitioners have annexed an extract from an Article by J. Koch Milk Crumb : The Modern Chocolate Engredient". It sets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Tariff Item No. 1A. The Bombay High Court in their order referred to above held that crumbs were not excisable under Tariff Item No. 1A. On 22-4-1985 the Assistant Collector classified it under the Residuary Item T.I. 68 but extended the benefit of Notification No. 118 of 1975 which exempted any dutiable goods when captively consumed in the manufacture of further dutiable goods. Against this order the Collector (Appeals) passed the impugned order. Significantly after the change over to the new Tariff, the respondents continued to file classification showing crumbs as falling under sub-heading 1804 and claiming benefit of the Notification No. 88 of 1986, dated 10-2-1986. 5. Learned SDR claimed that the reliance placed by the Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment of the Bombay High Court in WP-5051/76 cannot be construed to mean that milk crumb was chargeable to duty under T.I. 68. 6. In reply to a query learned Advocate clarified that that unit at Indori was not a separate profit centre. There were no sales. The goods moved under a challan both ways. In reply to another query he stated that the crumbs had shelf life of 2-3 months. 7. Learned DR in his counter submitted that at all times the respondents had been agitating on the classification of the impugned goods. At no time they had challenged the identity of the impugned goods as goods under the definition of the Central Excise Law. Even after the judgment of the Collector, they had continued to file classification lists showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ody of judgments on this issue. The early judgments favoured the stand of the Revenue. In their decision in the case of Indian Oil Company v. CCE, Calcutta - 1984 (15) E.L.T. 456 the Tribunal held that where the intermediate goods were used by the manufacturer themselves in further processes their marketability was proved by their utility for such purposes. However, in the latter judgment in Union Carbide India Ltd. v. Union of India - 1986 (24) E.L.T. 169 the Supreme Court held that the term goods must refer to articles which are capable of being sold to consumers. Citing this judgment of the Supreme Court, the Bombay High Court in the case of Union of India v. Shakti Industry Pvt. Ltd. - 1989 (39) E.L.T. 509 (Bombay) held that - to beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tariff, since it was not marketable it could not be termed as goods . 12. Who has to prove the marketability? The ratio of available judgments is that this burden has to be discharged by the Department. The Supreme Court in their judgment in the case of CCE v. Ambalal Sarabhai Industries - 1989 (43) E.L.T. 214 (SC) held that where the assessee claims that the goods were not marketable, the burden is on the Department to prove that such goods were either marketed or were marketable. The Tribunal in their decision in the case of Jagatjit Cotton Textile Mills v. CCE - 1990 (50) E.L.T. 379 had also held the same view. 13. In the present case the Revenue has urged that these goods were moved from Induri to Thane, that such movement itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is sold as chocolate in western countries. In the present case there is absolutely no material on record which would suggest that milk crumb is marketed in western countries as chocolates or that it is understood in common parlance in western countries as chocolates. Even assuming that to be so, such common parlance in western countries is not relevant for the purpose of construing a tariff item in our country. There is no material on record which would show that milk crumb is either understood in common trade parlance in our country as chocolates or that it is marketed as chocolates. That milk crumb falls within the tariff item 1A. Thus, in the case of Colgate Palmolive (India) Ltd. v. Union of India and others reported in 1980 Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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