Marketability of intermediate sugar syrup must be freshly examined before any central excise duty demand can stand.

An intermediate product is liable to central excise duty only if marketability is established on a fresh factual examination. Sugar syrup generated during manufacture and captively used in the factory required reconsideration on that issue, because earlier similar cases had treated marketability as the decisive question. The impugned order was set aside and the matter remanded to the original adjudicating authority for fresh determination of whether the syrup was marketable before any duty demand could be sustained.

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Issues: Whether sugar syrup emerging at an intermediate stage in the manufacture of exempt biscuits was marketable so as to attract central excise duty, and whether the matter required fresh consideration on the question of marketability.

Analysis: The biscuits manufactured by the appellant were exempt from duty where the MRP was below the prescribed limit. The dispute centred on sugar syrup arising during manufacture and captively used in the factory. The Tribunal noted that in earlier cases involving similar facts, the question of marketability of such sugar syrup had been treated as the crucial issue and the matters had been remanded for examination of that aspect. Following the same approach, the Tribunal held that the original adjudicating authority must reconsider whether the sugar syrup was marketable, including in the light of the earlier remand decision and the cited precedent on the same issue.

Conclusion: The demand could not be finally sustained without a fresh finding on marketability, and the impugned order was set aside with remand to the original adjudicating authority.

Ratio Decidendi: An intermediate product is not liable to excise duty unless its marketability is established on a fresh factual examination.

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