Marketability under excise law fails where sale of the product would itself be unlawful, defeating duty liability.

Sugar syrup manufactured for captive consumption was treated as non-marketable because its sale would have violated the Prevention of Food Adulteration Rules, 1959, which restrict artificial sweeteners to specified products. The article states that goods cannot be regarded as marketable for excise purposes if they cannot lawfully be sold or exchanged in the market. On the evidence discussed, the department failed to establish marketability, so the syrup was not liable to excise duty and the related duty demand, penalty, and interest could not survive.

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Issues: Whether the sugar syrup manufactured for captive consumption was marketable and therefore liable to excise duty.

Analysis: The commodity contained sodium saccharin, and its sale would offend the Prevention of Food Adulteration Rules, 1959, which prohibit use of artificial sweeteners except in specified products. A product cannot be treated as marketable for excise purposes if it cannot lawfully be sold or exchanged in the market. The evidence relied on by the department did not establish marketability of the goods in question.

Conclusion: The sugar syrup was not marketable and was not liable to excise duty.

Final Conclusion: The duty demand, along with the related penalty and interest, could not survive and the appeal succeeded.

Ratio Decidendi: A commodity is not marketable, and hence not excisable, if its sale would be unlawful under the law governing its use and sale.

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