Marketability test for excise duty fails where temporary pontoons for jetty construction are not shown to be commercially sold goods.

Temporary floating structures fabricated from client-supplied materials for jetty construction were examined under the tariff entry for floating structures, but classification alone was held insufficient without proof of marketability. The governing test applied was whether the article is commercially known in the market as a product bought and sold, and the burden to establish that condition lay on the Revenue. As no material showed that the pontoons were marketable or capable of being sold as goods, they were not liable to excise duty, and the demand of duty, interest and penalty was unsustainable.

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Issues: Whether the temporary floating structures/pontoons fabricated for jetty construction were marketable goods and therefore excisable, and whether the demand of duty, interest and penalty could be sustained.

Analysis: The temporary structures were fabricated from materials supplied by the client for use during construction of the jetty and were dismantled after the work was completed. The relevant tariff entry for floating structures was examined, but classification alone was insufficient unless the Revenue established marketability. The governing principle applied was that marketability requires proof that the article is commercially known in the market as a product bought and sold, and the burden to prove this lies on the Revenue. No material was produced to show that the structures were commercially known in the market or capable of being marketed as pontoon-like goods.

Conclusion: The structures were not proved to be marketable goods and were not liable to excise duty. The demand of duty, interest and penalty was unsustainable and the appeal was allowed in favour of the assessee.

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