TMI Blog2017 (8) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... or of any rule or regulation made thereunder. Revenue has failed to prove that sugar solution/sugar syrup in question is marketable and in the absence the said element, the sugar syrup/sugar solution is not excisable. Consequently, no duty can be demanded from the appellant. Appeal allowed - decided in favor of appellant. - E/60389/2016-DB, E/Misc./60104/2017 - A/61608/2017-EX[DB] - Dated:- 8-8-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri Tarun Gulati, Advocate for the Appellant Shri Atul Handa, A.R. for the Respondent ORDER Per : Ashok Jindal The appellant is in appeal against the impugned order wherein the demand has been confirmed on sugar solution/sugar syrup manufactured at intermediate stage during the manufacture of Pro-biotic Milk. 2. The brief facts of the case are that the appellant is manufacturing Pro-biotic Milk, falling under Chapter Heading 0403 of the First Schedule of the Central Excise Tariff Act, 1985, which is exempted from payment of duty. During the course of audit, it was observed that the appellant is also manufacturing plastic bottles and sugar syrup and consuming the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the same are not being actually marketed cannot be adopted for holding in favour of the appellant. Similarly, as observed by the Hon'ble Apex Court, the short shelf life cannot be equated to No shelf life and short shelf life would not ipso-facto mean that product cannot be marketed. Further, CBEC Circular No.780/13/2004-CX dated 12.03.2004 clarified that if sugar syrup is marketable as such, without any reference to percentage of sugar concentration, then the same is excisable if taken for captive consumption or removed as such. In view of the above, show cause notice was issued to the appellant to demand duty on Sugar Syrup manufactured by them as an excisable commodity falling under CETH 17029090 being a marketable commodity, which has been captively consumed for manufacture of Pro-biotic Milk. The matter was adjudicated, demand of duty along with interest was confirmed and equivalent amount of penalty was imposed. Aggrieved from the said order, the appellant is before us. 3. The Ld. Counsel for the appellant submits that the leviability of Central Excise duty on Sugar Syrup has been clarified by CBEC vide following circulars:- (a) Circular No.9/89 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Products were never alleged in the show cause notice. Therefore, the fact of sugar syrup sold by them and paying duty being marketable is not applicable to the facts of this case, therefore, he submits that the adjudicating authority fell in error in holding against the appellant. He further submits that appellant has shown their product flow chart and from the products flow chart, the sugar is dissolved with water and the same is sent to the storage tank wherein fermented milk and flavours are added. It is evident from the fact that Sugar Syrup has not been sold by the appellant as such. He further submits that these issue have been raised by the appellant in reply to the show cause notice but no credence was given by the ld. adjudicating authority. Further, the appellant has taken certificate dated 11.02.2015 from Dr. Gaba Food Consultancy Services and was produced before the adjudicating authority but no credence was given to the said evidence. In the light of above submissions, ld. Counsel prays that the impugned order is to be set-aside. He also relied upon the decision of this Tribunal in the case of P'fizer Limited Vs. CCE, Mumbai - 2002 (146) ELT 477 (Tri. Mum.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionable taints, flavours, artificial sweetening agents, extraneous matter and crystallization. It may contain citric acid, permitted colours, permitted preservatives and permitted flavouring agents. It shall also conform to the following standards namely:- Total soluble solids Not less than 65 per cent by weight. As per the said regulations, the sugar syrup having total soluble solids Not Less than 65 per cent by weight, can be sold by the appellant. Further, we find that the appellant has obtained a certificate from Dr. Gaba Food Consultancy Services, which is extracted below:- As per the said certificate, products which contain sugar concentration of less than 63.5% are perishable and have no shelf life and therefore unfit for distribution and marketing since it is unsafe for consumption. Moreover, as per Section 55 of the Food Safety and Standards Act, 2006, any person who sales such goods for human consumption, which is unsafe, shall be punishable and penalised and it was held that sugar solution emerging at intermediate stage in the factory of the appellant is not saleable in the said form. 6. We have gone through the CBEC Circulars, issued fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re concentrated solution of sugars such as sucrose in water or other aqueous liquids. When purified water is used in making a solution of sucrose the preparation is known as syrup or simple syrup. In manufacturing syrups the sucrose must be selected carefully and a purified water free from foreign substance and clean vessels and containers must be used. Dilute solutions of sucrose are prone to growth of molds, yeast and other micro-organisms. In concentration of 65% by weight or more the solution will retard the growth of micro-organisms. Thus it may have shelf life without addition of any preservative. However, according to IS: 4935-1968 synthetic syrups may be prepared with or without addition of citric acid to sugar Syrups and flavouring essences. The total soluble solid content in synthetic syrup shall be not less than 65% by weight. The only additives that shall be used in synthetic syrups are citric acid and permitted colours. As per the said Circular, total soluble solid in concentrate sugar syrup should not be less than 65 per cent by weight to be held as marketable. Further, the Circular 780/13/2004-CX dated 12.03.2004 has dealt with the issue of excisability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the form of sugar into a solution form. Sugar syrup is separately classificable under Tariff sub-heading 1702.30. Marketability, no doubt, may be the burden of the Revenue to prove but there is no contrary evidence submitted by the appellants that the product is unstable and therefore, it cannot be marketed. Simply because they are not marketing it cannot be inferred therefrom that the product is non-marketable. We, therefore, hold that sugar syrup is liable to duty. In the said case, the marketability was required to be proved by the Revenue but as no contrary evidence was submitted by the appellant that the product is unstable and it cannot be marketed but in the case in hand, the appellant has contested that the sugar syrup/ sugar solution manufactured by them emerges during the course of manufacturing of Pro-biotic Milk and cannot be marketed and cannot be marketable at all as it does not have any shelf life and not having the prescribed soluble solids for sale. Therefore, the said decision is not relevant to the facts of this case. Further, we find that in the case of Smithkline Beecham Pharma (supra) , this Tribunal has observed as under:- 4. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was incapable of being used for any other purpose. It further cannot be disputed that even the life for 15 days depended on maintenance of particular temperature and heat. It cannot, therefore, be said that the goods were marketable or capable of being marketed. Since the test of marketability or capable of being marketable applies even to those goods which are mentioned in the tariff item the intermediate resin produced by the appellants which are mentioned as resols under Tariff Item No. 15A were not exigible to duty. The finding of the Tribunal that once the product manufactured by the appellants answered the chemical description of the product under Tariff Item 15A it was assessable to duty whether it was marketable or not was thus not well founded. Further we also find that Commissioner has considered this aspect in the impugned order. Paragraphs 18, 19 20 of the impugned order are relevant and are reproduced below : C.B.E. C. has issued a clarification in its letter dated 3-7-1996 regarding the marketability of sugar syrup based on the opinion of the Chief Chemist. The above circular holds that sugar syrup has a shelf life and remains stable only when the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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