Marketability of by-products in manufacture determines excise liability, and waste material is not dutiable without proof of commercial marketability.

Soapy matter arising during the manufacture of banaspati was treated as waste and not shown to be commercially marketable, so it was not liable to central excise duty. The record also did not establish that the assessee had carried out any separate process to convert it into acid oil or soap stock. Applying the earlier view on a similar manufacturing process, the document states that a waste or intermediate product is exigible to excise only if marketability as such is proved.

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Issues: Whether soapy matter obtained during the manufacture of banaspati was a marketable commodity liable to central excise duty.

Analysis: The process materials and the manufacturing flow indicated that the soapy matter emerged as waste during oil manufacture and was not shown to have been commercially marketable. The record also did not establish that any alternative process had been undertaken by the assessee to convert it into acid oil or soap stock. In these circumstances, the earlier view on the assessee's own similar process was followed.

Conclusion: The soapy water obtained by the manufacturer was held to be not a marketable commodity and therefore not liable to excise duty.

Final Conclusion: The appeal was allowed, with the disputed product treated as non-marketable and outside the excise levy.

Ratio Decidendi: A waste or intermediate product arising in manufacture is not exigible to excise duty unless it is shown to be marketable as such.

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