Marketability of intermediate goods depends on saleability, not actual packing or captive consumption before clearance.

Nylon chips arising at an intermediate stage in the manufacture of nylon filament yarn were treated as marketable goods liable to central excise duty even when some quantity was captively consumed. The applicable test was whether the goods were capable of being brought to market for sale, not whether they were actually sold in every instance. Evidence that some chips were cleared on payment of duty supported marketability, and the absence of packing or nitrogen spraying for captively consumed goods did not negate that character because such precautions concern actual marketing, not inherent saleability. On that basis, the Revenue was held to have shown marketability and refund was not available.

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Issues: Whether nylon chips arising at an intermediate stage in the manufacture of nylon filament yarn were marketable and therefore capable of being subjected to central excise duty, notwithstanding their captive consumption.

Analysis: The product was found to be cleared by the assessee on payment of duty in some cases, which supported marketability. The fact that captively consumed nylon chips were not packed or sprayed with nitrogen did not make them incapable of being brought to market, because packing and precautionary measures are relevant to actual marketing and not to the inherent ability of the goods to be sold. The applicable test was whether the goods were capable of being brought to the market for sale, and the evidence showed that nylon chips were such goods, even if they required packing and spraying before despatch.

Conclusion: The nylon chips were marketable and the Revenue had discharged the burden of showing marketability; the assessee was not entitled to refund.

Ratio Decidendi: Goods remain marketable if they are capable of being brought to market for sale, and the need for packing or other precautions before marketing does not ate marketability merely because the same goods are captively consumed without such treatment.

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