Marketability test for excise duty upheld where an intermediate product was capable of sale despite captive use.

Benzyl Methyl Salicylate was treated as marketable and therefore excisable because the evidence showed a definite chemical composition, drum packing, long-distance transport, and shelf life sufficient for use in another unit. Actual sale was not required; capability of being brought to the market was enough, and departmental material plus market enquiries were accepted as sufficient proof of marketability. The dissent took the view that marketability was not established on the evidence, but the prevailing view applied the test of capability for sale and upheld central excise duty.

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Issues: Whether Benzyl Methyl Salicylate was marketable and therefore an excisable commodity liable to central excise duty.

Analysis: The majority held that the product had a definite chemical composition, was packed in drums, transported over a long distance, and retained shelf life before use in another unit. The evidence showed that it was a stable intermediate product capable of being brought to market, even though it was not actually sold. The absence of actual sales did not displace marketability, and the departmental material and market enquiries were treated as sufficient to establish that the goods were capable of being marketed and were therefore excisable.

Conclusion: The product was held to be marketable and liable to excise duty.

Dissenting Opinion: The Judicial Member held that the Department had not proved marketability and that actual or capable sale in the market was not established on the evidence.

Final Conclusion: The appeal failed because the product was held to satisfy the test of marketability and to attract central excise duty.

Ratio Decidendi: A product is excisable if, on the evidence, it is shown to be capable of being brought to the market for sale, even if it is not actually sold and is used captively within the assessee's group.

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