Marketability is essential for excise duty on intermediate goods; molten iron was held not liable on that basis.

Molten iron emerging at an intermediate stage and captively used in making exempt final products was treated as not marketable and therefore not excisable. The Tribunal followed its earlier majority view that molten iron at about 1300 C is not a commercial commodity, so mere tariff coverage does not by itself attract excise duty. On that basis, the duty demand on the intermediate product was held unsustainable and set aside.

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Issues: Whether molten iron emerging at an interim stage and captively used in the manufacture of final exempt products is a marketable excisable commodity liable to duty.

Analysis: The Tribunal followed its earlier majority view that molten iron at about 1300 C is not a marketable commodity. It held that even if the item finds place in the tariff, duty cannot be levied unless the goods are marketable and capable of being treated as excisable goods in the commercial sense.

Conclusion: The demand of duty on molten iron was not sustainable and was set aside.

Final Conclusion: The appeal succeeded and the duty demand against the assessee was annulled.

Ratio Decidendi: Tariff coverage alone does not attract excise duty unless the intermediate product is marketable and therefore excisable.

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