Yarn wound on cheeses not paper cones still marketable, subject to excise duty.

The Tribunal affirmed that the yarn used by the appellant for fabric manufacturing was marketable, despite being wound on cheeses instead of paper cones. The Tribunal emphasized that the form of packaging did not affect the yarn's marketability, as it still had a shelf life and could be sold without further processing. Legal precedents were cited to support the decision that goods need not be actively marketed to be considered marketable for excise duty purposes. Consequently, the Tribunal rejected the appeal, ruling that excise duty was applicable on the yarn.

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Issues:
1. Whether the yarn captively consumed by M/s. Hindon River Mills for fabric manufacture is marketable.

Analysis:
The appeal raised the issue of whether the yarn used by the appellant for manufacturing fabrics is capable of being marketed. The appellant contended that the yarn, which was wound on cheeses and not on paper cones, was not marketable as it required further processing before being sold. They argued that the yarn in its current form was not ordinarily bought and sold in the market. The appellant relied on the decision of the Delhi High Court and obtained an interim order for nil excise duty on the yarn. However, subsequent decisions by the assessing authorities went against them, leading to the present appeal.

The appellant's advocate highlighted that the yarn's marketability was contingent on it being wound on paper cones, which was necessary for it to be sold in the market. On the other hand, the respondent argued that the yarn's marketability was not solely determined by its packaging but by its quality and properties, which remained the same whether wound on cones or cheeses. The respondent cited legal precedents emphasizing that goods need not be actually marketed to be considered marketable for excise duty purposes.

The Tribunal analyzed the arguments presented by both sides. It noted that the appellant did not dispute that the yarn could be marketed once wound on cones, indicating its marketability. The Tribunal emphasized that the form of packing, such as cones or cheeses, did not affect the yarn's marketability. Additionally, the Tribunal pointed out that the yarn wound on cheeses still had a shelf life and could be sold and purchased in the market. Referring to legal precedents, the Tribunal clarified that marketability did not require the goods to be actively marketed but rather be capable of being sold to consumers without further processing. The Tribunal rejected the appeal, affirming that the yarn used by the appellant was indeed marketable, and thus, excise duty was leviable.

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