Marketability as a condition for excisability fails where captive intermediate goods lack proof of saleability.

Marketability is a condition precedent to excisability, and the Revenue must prove that a captively consumed intermediate product is capable of being sold in the market. The article explains that bead wire rings used in the manufacture of animal-drawn vehicle and hand-cart tyres had an extremely short shelf life and were intended for use within hours of manufacture, so the evidence did not show actual marketing or sufficient marketability. Reference to similar products and duty payment by another manufacturer was insufficient. On the stated facts, the Department failed to discharge the burden of proof, and the goods were treated as non-marketable and not excisable.

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Issues: Whether the bead wire rings manufactured by the assessee and captively consumed in the manufacture of animal-drawn vehicle and hand-cart tyres were marketable and therefore excisable.

Analysis: The only substantive question was whether the goods could be treated as excisable intermediate goods. The Revenue had to establish marketability. The evidence showed that the product was a rubberised bead wire ring with a very short shelf life, intended for use within a few hours of manufacture. The material relied upon by the Revenue did not establish that the assessee's product was actually marketed or had sufficient shelf life to reach the market. Similar products referred to by the Revenue were not shown to be identical to the assessee's product, and the fact that another manufacturer paid duty on a similar item was not ative of marketability. On the evidence, the Department failed to discharge the burden of proving that the goods were marketable.

Conclusion: The bead wire rings were not marketable and hence not excisable; the duty demand and penalty could not be sustained.

Ratio Decidendi: Marketability is a condition precedent to excisability, and where the Revenue fails to prove that a captively consumed intermediate product has sufficient shelf life to be sold in the market, duty cannot be levied on it.

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