TMI Blog2015 (4) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing dutiable final product. The proviso to notification is applicable only in a situation where by using common Cenvat credit availed inputs, a manufacturer manufactures dutiable as well as exempted final product and in respect of the exempted final product, the obligation under Rule 6 of the Cenvat Credit Rules has been discharged. For classification as sugar syrup blend in this sub-heading the product must contain 50% by weight of fructose sugar in dry state There is no evidence to show that before seeking classification of the goods, in question, under sub-heading 17029090, the samples drawn from the goods had been got tested by the CRCL to confirm as to whether the fructose content of the goods, in question, in dry stage is 50% by weight. Just because the appellant during period till June 2008 were paying duty on the goods by classifying the same under sub-heading 17029090, it cannot be presumed that they had accepted that the goods, in question, conform to the description of sugar syrup blends of sub-heading 170290 for which the sugar syrup in dry stage must contain 50% by weight of fructose. Marketability of the goods produced by a particular manufacturer ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod, the biscuits in packaged form with per kg retail price equivalent not exceeding ₹ 100/- were fully exempt from duty. The appellant during some period were manufacturing only the exempted biscuits and during other period exempted as well as dutiable biscuits. For manufacture of the biscuits, the appellant prepare a sugar syrup by dissolving cane sugar in water at 108 degree Celsius temperature and adding very small quantity of citric acid. This sugar syrup was being used in the manufacture of the biscuits. The Department was of the view that since biscuits of retail sale price equivalent not exceeding ₹ 100/- per kg. were fully exempt from duty, the benefit under exemption Notification No. 67/05-CE would not be admissible in respect of sugar syrup. The Department was also of the view that this sugar syrup is classifiable under sub-heading 17029090 and is also marketable. It is on this basis that show cause notices were issued for demand of duty in respect of clearances of the sugar syrup for captive use during the above-mentioned periods. The duty demands were confirmed by the Assistant Commissioner alongwith interest and penalties were also imposed on the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he requirement of pre-deposit of penalty by the Directors/Partner of the appellant company/firm would stand waived and its recovery stayed during the pendency of the appeals. The appellant, thereafter, complied with this stay order. 1.4 Subsequently, the Tribunal vide stay order dated 4th February 2014 extended the stay order against which the Department filed appeal before Hon ble Allahabad High Court. Hon ble Allahabad High Court vide order dated 25/9/14, while not interfering with the Tribunal s order extending the stay, directed the Tribunal to decide these matters within a period of six months from the date of the order. Accordingly, these appeals have been taken up for final hearing. 2. Heard both the sides. 3. Shri M.H. Patil, Advocate, the learned Counsel for the appellant, pleaded that in the impugned order the Commissioner (Appeals) has wrongly given a finding that the appellant have not disputed that the product, in question, is invert sugar syrup and is classifiable under heading 17029090, that not only in the appeals before the Tribunal, but also in the appeals filed before the Commissioner (Appeals), the question of classification of the goods, in question, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri R.K. Grover, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that the appellants have not disputed the classification of the sugar syrup under heading 17029090 and that since similar goods were being sold by M/s Dhampur Speciality Sugars Ltd. to M/s Britannia Industries, M/s J.B. Mangaram Food Industries and M/s ITC Ltd., the goods, in question, have to be treated as marketable. Shri Grover cited the judgments of Nicholas Piramal India Ltd. vs. CCE, Mumbai reported in 2010 (260) E.L.T. 338 (S.C.), wherein it was held that shelf-life of product is not a relevant factor to test marketability unless it is shown that product has absolutely no shelf-life or shelf-life is such that it is not capable of being bought or sold during that shelf-life and also in the case of Gujarat Nermada Valley Fert. Co. Ltd. vs. CCE CUS reported in 2005 (184) E.L.T. 128 (S.C.), wherein it was held that actual sale is not necessary but articles must be capable of being sold in market or known in market as goods and in this regard the Apex court had relied upon its earlier judgment in the case of Bhor Industries Ltd. vs. CCE, Bombay re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of dispute, were manufacturing only exempted final product or alongwith the exempted final product were also manufacturing dutiable final product. The proviso to notification is applicable only in a situation where by using common Cenvat credit availed inputs, a manufacturer manufactures dutiable as well as exempted final product and in respect of the exempted final product, the obligation under Rule 6 of the Cenvat Credit Rules has been discharged. Shri Patil in this regard has cited the judgment of the Tribunal in the case of Sakthi Sugars Ltd. vs. CCE, Salem reported in 2008 (230) E.L.T. 676 (Tri. Chennai). We have gone through this judgment. In our view ratio of this judgment is not applicable to the facts of this case. 8. Next comes the question of classification. The Department has classified the product, in question, under sub-heading 17029090. Sub-heading 17029090 comes under the 6 digit sub-heading 170290 which covers other sugars including invert sugar and sugar syrup blends containing in the dry stage 50% by weight of fructose . The goods, in question, are sought to be classified under 17029090 as sugar syrup blends containing in dry stage, 50% by weigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich it emerges. In this regard the marketability of the goods produced by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that the invert sugar syrup being manufactured by M/s Dhampur Speciality Sugars Ltd. is being sold to M/s Britannia Industries, M/s J.B. Mangaram Food Industries and M/s ITC Ltd. In our view this basis of holding that the goods, in question, are marketable is absolutely wrong, as it has been presumed that the sugar syrup being made by the appellants is identical to the invert sugar syrup being made by M/s Dhampur Speciality Sugars Ltd. for which there is no basis. Chemically, invert sugar is obtained by Hydrolysis of cane sugar (sucrose, a disaccharide with specific rotation of + 66.5?) and the same is a mixture of glucose (with specific rotation of +52.7?) and fructose (with specific rotation of - 92?), with net specific rotation of 19.7?. The process of hydrolysis of cane su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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