Tribunal rules molten DMT not excisable due to lack of marketability

The Tribunal ruled in favor of the appellant, M/s. J.K. Synthetics, stating that recovered DMT in molten form is not excisable due to the lack of marketability. The judgment emphasized the necessity of marketability for excisability, as per Supreme Court rulings, and highlighted that the mere availability of DMT in powder form in the market does not establish marketability of DMT in molten form. Therefore, the recovered DMT in molten form does not meet the marketability test and is not subject to excise duty.

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Issues involved:
Whether DMT recovered by re-cycling of Polyester Fibre waste and Polyester Yarn waste is exigible to excise duty.

Analysis:

1. Marketability as essential condition for excisability:
The appellant argued that recovered DMT in molten form is not capable of being bought or sold, citing precedents like Bhor Industries Ltd. v. CCE and LML Ltd. v. CCE. They emphasized that marketability is crucial for excisability, as established in judicial decisions. Additionally, reliance was placed on UOI v. Delhi Cloth and General Mills Ltd. and Jagjit Cotton Textile Mills Ltd. to support the argument.

2. Counter-argument on marketability by the Respondent:
The Respondent contended that DMT in solid form is traded in the market, and the form of DMT does not affect its marketability. Referring to UOI v. Sonic Electrochem (P) Ltd., they highlighted that marketability is based on commercial identity known for buying and selling, irrespective of demand. The Respondent also referred to Andhra Pradesh State Electricity Board v. CCE to emphasize marketability criteria and the duty liability for captively consumed goods.

3. Judgment on marketability and excisability:
The Tribunal considered both arguments and emphasized the necessity of marketability for excisability, as per Supreme Court rulings. Referring to Moti Laminate Pvt. Ltd. v. CCE, the Tribunal highlighted the importance of an article being capable of being bought and sold to attract excise duty. It was noted that the mere availability of DMT in powder form in the market does not establish marketability of DMT in molten form. Drawing parallels with Jagjit Cotton Textiles case, the Tribunal concluded that recovered DMT in molten form does not meet the marketability test and, therefore, is not excisable.

4. Conclusion:
The Tribunal ruled in favor of the appellant, M/s. J.K. Synthetics, stating that recovered DMT in molten form is not excisable due to the lack of marketability, as per established legal principles and precedents. The judgment highlighted the significance of an article being capable of being bought and sold in the market to attract excise duty, ultimately leading to the decision in this appeal.

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