9911796707
TMI Blog2024 (6) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... . The department issued show cause notice on 11.11.1986 proposing to classify the goods in question under Sub heading No.5608.00. The appellants opted for provisional assessment by reclassifying the product under sub heading 5607.90. The jurisdictional Assistant Commissioner ordered for provisional assessment on 25.08.1986. Meanwhile, samples of the goods were sent to the Chemical Examiner, Custom House, Madras for his opinion on the characteristics of the goods. As per report dated 12.01.1988, the Chemical Examiner opined that, "the said samples were composed of core polyester filament yarn to which cotton fibers have been embedded throughout its length by means of high twist". 3. Based on the process of manufacture of the goods and in view of the special type of composition & construction of the yarn as brought out from the test report, the department issued show cause notice dated 17.01.1989 proposing re-classification of the goods under Sub heading No. 5606.00 as "special yarns" and raised a demand for differential duty of Rs. 9,21,130/- (Basic Excise Duty) and Rs. 22,890/- (Special Excise Duty) total duty of Rs.9,44,020/-. After adjudication, the original authority re-classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard both sides. We are of the view that it is only in the event of the adjudicating authority holding that the goods are marketable, that the issue of classification of the goods becomes relevant. If the lower authority comes to the conclusion that the goods are not marketable then there is no relevance of the classification for the reason that the goods would not attract any duty liability. We, therefore, do not consider it necessary to entertain appeals at this stage on the issue of classification. However, we make it clear that in the event of it being held that the goods are marketable, it shall be open to the assessees to challenge the classification. [They have been claiming that the goods if marketable would fall for classification under Chapter Heading 54.02]. The question of marketability is to be decided afresh in the light of the evidence available on record. 9. Pursuant to the above order passed by Tribunal, the Assistant Commissioner vide Order in Original dated 23.08.2012, held that the goods are marketable and held that goods are classifiable under Heading No. 56.06. The demand of duty proposed in the show cause notice was confirmed. The Assistant. Commissioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant company, had filled an affidavit dated 26.11.2001 stating that the goods are not marketable. The said affidavit has not been countered by the department in any manner by adducing evidence. 14. The Ld. Counsel adverted to para 11 of the impugned order dated 25.10.2013 to submit that, there is an observation that the goods are not generally being bought and sold and it has no demand in the market. However, this fact has been brushed aside as irrelevant. The adjudicating authority as well as the Commissioner (Appeals) has held that the goods are marketable observing that the goods are capable of being bought or sold in the market. The decision in the case of Nicholas Piramal India Ltd., Vs. Commissioner of C. Ex, Mumbai - 2010 (260) ELT 338 (S.C.) has been wrongly applied to decide the issue of marketability. The facts in the case of Nicholas Piramal India Ltd., (supra) is that the appellant therein had opted not to sell the product in the market and the Hon'ble Court observed that the said option cannot be construed to mean that the goods are not capable of being bought or sold. Moreover, the contention of the appellant therein that the goods do not have any shelf-life was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence, the goods are not marketable. 20. In the case of Needle Industries (India) Pvt. Ltd., Vs. Commissioner of C. Ex., Salem - 2017(6) G.S.T.L. 159 (Tri.-Mad) the issue of marketability was considered with regard to the item Gold Potassium Cyanide Solution. The contention of the department that the goods are marketable was not accepted by the Tribunal as there was no evidence put forward by the department to show that the goods are being bought and sold in the market. 21. It is submitted that, when the goods are not marketable the goods are not excisable and therefore the issue of classification does not have any relevance. When the goods are not marketable, they are not excisable goods as per 2(d) of the definition prior to 10.05.2008 and therefore the levy of duty cannot sustain. The Ld. Counsel submitted that though there is no proposal in the show cause notice to impose penalty the adjudicating authority has imposed equal penalty, under section 11 AC which has been confirmed by the Commissioner (Appeals). The proceedings having been emanated from a provisional assessment, there was no occasion to allege any violation of law so as to impose penalty. It is submitted that, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of marketability. It is observed by the Commissioner (Appeals) that the impugned products are monopoly products manufactured only by the appellant and such goods are not available in the market. He then proceeds to hold that goods are marketable by merely placing reliance on the decision in the case of Nicholas Piramal India Ltd., (supra). 28. There is a clear finding that the goods are not available in the open market. If the appellant manufactures excess of the impugned products, they would not be able to sell these products in open market as there are no buyers to purchase the same. So, also in case they have shortage of these intermediate products, they would not be able to buy it from the market as it is not available in the market. It is very much clear that the goods are not marketable. The decision in the case of Pyramid India Limited (supra) is not applicable to the facts of the present case. In the said case, the goods had a shelf life of at least 2 to 3 days and the Hon'ble Apex Court held that the option of the appellant not to sell the goods even though had a short shelf life cannot be make the goods not marketable. The goods were available in the market. Moreover, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the goods satisfy twin test, that becomes "excisable" goods following the ratio laid down by the Apex Court in the case of Board of Trustees v. CCE, A.P. - 2007 (216) E.L.T. 513 (S.C.). The first test is that the goods in question must have been manufactured and find place in the Central Excise Tariff Act. The second test is marketability in the common parlance. The goods manufactured by the Coimbatore unit of the appellant was only intermediate product and not marketable in the common parlance as tradeable commodity. Therefore, the goods came from Coimbatore to Pondicherry being used for manufacture of finished goods in its own unit shall not make the appellant liable in respect of the intermediate product. 3. Revenue, on the other hand, says that when the intermediate product was manufactured, they are liable to duty. 4. It does not appeal to common sense how non-excisable goods shall be dutiable without meeting the twin tests as has been held by the Apex Court in the case of Board of Trustees (supra). Added to that, show cause notice exhibits that Revenue has not discharged its burden of proof to bring the goods to be called as "marketable" and "traded commodity". 5. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the market. If the goods are not capable of being sold then the test of marketability is not fulfilled. Further, the burden is on the Department to prove whether there is the process which constitutes manufacture and secondly whether the product is marketable." 8. It is also distressing to note that in spite of the two occasions that the matter has been remanded for de novo consideration, with specific instructions. Those instructions have not been complied with by lower authorities. Instead, the earlier orders seem to have been replicated ad nauseam. This has resulted in an appeal of 1994 year, traversing such a long course for over 27 years for closure. This certainly is not helping speedy dispensation of disputes. 9. In view of the discussions hereinabove and following judicial discipline, it is held that the product in question is definitely not marketable and therefore cannot be charged to duty as proposed by the department. The impugned order is therefore unsustainable and the appeal is allowed with consequential benefits, if any, as per law. 31.1 From the discussions made above and on the basis of evidence placed before us, we have no hesitation to conclude that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
