Marketability of contaminated aerated water prompts larger bench reference amid conflicting Tribunal views on remission and duty demand

Conflicting CESTAT Division Bench views on contaminated or non-marketable aerated water were identified, one requiring proof, permission or intimation before treating destroyed bottles as non-marketable, and another holding that over-filled or under-filled bottles had not reached the marketable stage and that remission was unnecessary. Because the later ruling did not consider the appellant's earlier case and a divergence in opinion appeared, the matter was referred for constitution of a larger bench to resolve the conflict.

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Issues: Whether duty demands and penalties on allegedly contaminated and non-marketable aerated water were sustainable, and whether conflicting Tribunal decisions on the marketability and remission issue required resolution by a larger bench.

Analysis: The order noted competing Division Bench views: one line of authority had rejected the plea that destroyed aerated water bottles were non-marketable in the absence of proof, permission, or intimation, while another had held that over-filled or under-filled bottles had not reached the marketable stage and that remission under the excise regime was not called for. It was observed that the earlier decision in the appellant's own matter had not been considered in the later ruling and that there appeared to be a conflict of opinion between the two Division Bench decisions.

Outcome: The papers were directed to be placed before the President for constitution of a larger bench to resolve the conflict.

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