TMI Blog2022 (2) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... RDER NO. A/85102/2022 - Dated:- 10-2-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Ms. Padmavati Patil, Advocate, for the Appellant Shri Sanjay Hasija, Superintendent, Authorised Representative for the Respondent ORDER This appeal is directed against Order-in-Appeal No. PII/RKS/106/2012 dated 16.04.2012 of the Commissioner of Central Excise (Appeals), Pune-II. The Commissioner (Appeals) upholding the order-in-original of the Assistant Commissioner, held as follows: ORDER 11. I uphold the impugned Order-in-Original No. Satara/144/Adj/2011, dated 30.12.2011, passed by the Assistant Commissioner, Central Excise, Satara Division. However, I allow the appellants to avail the Cenvat credit on inputs used in the manufacture of Sugar Syrup, subject to production of relevant duty paying documents and its verification by the jurisdictional Assistant Commissioner, as held in para 9 above. The appeal filed by the appellants is thus partially allowed in above terms and the impugned Order-in-Original is modified to the above extent. 1.2 The Assistant Commissioner vide his order referred to in above para held a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of Section 11A(1) of the Central Excise Act, 1944. (ii) Interest on the amount of duty not paid as mentioned above, should not be recovered from them, under the provisions of Section 11AB ibid. (iii) Penalty should not be imposed on them under the provisions of Rule 27 of the Central Excise Rules, 2002. 2.5 The show cause notice was adjudicated by the Assistant Commissioner as per para 1.2 above and the appeal filed by the appellants before the Commissioner (Appeals) was dismissed as per the impugned order. 3.1 We have heard Ms. Padmavati Patil, Advocate, for the appellants and Shri Sanjay Hasija, Superintendent, Authorised Representative, for the Revenue. 3.2 Arguing for the appellants, learned counsel submits that the issue involved in the matter has been settled by this Tribunal in their own case in their favour vide order No. A/88160/2018 dated 20.12.2018 and A/85151-85152/2019 dated 22.01.2019. Hence, as the issue is no longer res integra, the appeal should be allowed. 3.3 Learned AR reiterates the findings in the impugned order and submits that Admittedly the sugar syrup manufactured by the appellants using 80% sugar and 20% wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri-Chennai)], upheld by the Hon ble High Court of Madras, and Commissioner of Central Excise, Hyderabad v. Spectra Bottling Co Ltd [2006 (198) ELT 417 (Tri-Bang)] to arrive at the conclusion that concentration of sugar in the syrup of more than 65% and the presence of citric acid would render the goods marketable and, hence, liable to duty of central excise. 5. There can be no doubt that, unless otherwise established, the deemed marketability of sugar syrup is beyond question. It is also admitted that the appellant had been discharging duty liability on sugar syrup as intermediate goods till July 2008 and had discontinued payment of duty on advice from their client, M/s Parle Products Pvt Ltd. For the sweetening of biscuits , the addition of sugar syrup is a necessity and is, invariably, produced within the factory by dissolving table sugar in water using heat. This process, known as hydrolysis, converts table sugar into invert sugar and transforms the sucrose in the former into fructose and glucose of equal proportion. Though this hydrolysis can be achieved by application of heat, the addition of citric acid speeds up the process of conversion. Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of exempted biscuit is chargeable to central excise duty under sub-heading 17029090. We find that both the lower authorities have concluded that the sugar content is more than 80% on empirical basis without any chemical test having been done. In the absence of chemical test to ascertain the precise fructose content of the goods, any conclusion that the goods are classifiable under sub-heading 17029090 is not sustainable. We also find that the CBEC Circular dated 7.11.1994 relied upon by the lower authorities has been issued in respect of sugar syrup produced in the manufacture of aerated water and ayurvedic medicines. Hence, the same cannot be applied to the sugar syrup being produced for the biscuits without establishing that the two products are identical. We also find that issue in this appeal is squarely covered by the judgment of the Tribunal in the case of Rishi Bakers Pvt. Ltd. (supra), wherein the Tribunal has held as under: 8. Next comes the question of classification. The Department has classified the product, in question, under sub-heading 1702 90 90. Sub-heading 1702 90 90 comes under the 6 digit sub-heading 1702 90 which covers other sugars in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed law that the marketability of a product has to be established in the condition in which it emerges. In this regard the Apex Court in the case of Bata India Ltd. v. CCE, New Delhi (supra) has held that the test of marketability is whether product is marketable in condition in which 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 obtaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excise duty, the goods should not only be manufactured, i.e., come into existence, but also should be articles or products that are known to the market and must be capable of being brought and sold. Some emphasis has to be laid on the use of the word capable as actual sale of the product or article is not essential and required. This has been settled in a number of authorities of this Court and no longer res integra. There cannot be any doubt that intermediate products, even if captively consumed and not actually sold, may be liable to levy of excise duty if they satisfy the test of both manufacture and marketability. The aforesaid legal principle has been laid down by this Court in the judgments in Hindustan Zinc Ltd. v. Commissioner of Central Excise, Jaipur, reported in 2005 (181) E.L.T. 170 (S.C.), Union of India v. Delhi Cloth General Mills Co. Ltd., reported in 1997 (92) E.L.T. 315 (S.C.), Cadila Laboratories Pvt. Ltd. v. Commissioner, reported in 2003 (152) E.L.T. 262 (S.C.). In the decision in Hindustan Zinc Ltd. (supra), decided by three Judge Bench of this Court, it was also held, by this Court that marketability of a product is essentially a question of fact. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly laid down that marketability is question of fact and needs to be examined in facts of each case and for that shelf life cannot be relevant criteria. Contrary to revenue not having adduced any evidence to establish the marketability of sugar syrup , arising in the course of manufacture of biscuits, appellants have produced a substantial number of certificates earlier referred by us while recording the submissions made during the course of argument from the persons dealing in similar goods who clearly stated that sugar syrup of this type is never bought and sold in the market. In view of the above, and in absence of evidence to establish the marketability of sugar syrup, we are not inclined to accept the argument advanced by the revenue on the basis of this decision of Hon ble Apex Court. Same view was expressed by the Mumbai bench in case of Hindustan Breweries and Bottling Ltd. [2013 (294) ELT 279 (TMum)] observing as follows: 6. There is nothing on record, which shows that the slurry yeast obtained in the intermediate stage is actually being marketed or is in a marketable form. The only argument adduced is that it has a shelf life of two days and, therefore, it can be m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
