Marketable commodity test governs customs concession for machinery that only performs an intermediate process on non-saleable material.

Imported machinery qualified for the customs notification only if it itself produced a marketable commodity. The Auto Clipping Machine merely clipped and sealed pleated filter paper, and the resulting item was not commercially saleable as goods or wares. On that reasoning, the machine did not satisfy the production-of-commodities condition, and the import concession under Notification No. 11/97-Cus. was denied. The cited precedents were distinguished because the decisive test remained whether the machine directly produced a commodity capable of market sale.

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Issues: Whether the imported Auto Clipping Machine was a machine for production of commodities so as to qualify for the benefit of Notification No. 11/97-Cus. dated 01.03.1997.

Analysis: The decisive test applied was whether the machine itself produced a commodity that was marketable. The machine, as described by the appellant, only clipped and sealed the side ends of pleated filter paper. The resulting clipped paper was admittedly not marketable and could not be sold as goods or wares. On that footing, the machine did not produce a commodity by itself. The cited precedents were distinguished and the reasoning of the Commissioner, including the meaning of commodity as something commercially saleable, was accepted.

Conclusion: The machine was not machinery for production of commodities and the notification benefit was rightly denied.

Ratio Decidendi: To qualify for an import concession for machinery used in production of commodities, the machine must itself produce a marketable commodity; a machine that merely performs an intermediate process on a non-marketable item does not satisfy the condition.

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