Marketability is essential for excise duty on intermediate goods; captive sugar solution was not shown to be marketable.

Central excise duty on an intermediate product depends on proof that it is marketable or capable of being marketed. Mere chemical description or limited shelf life is insufficient. On the evidence, the low-concentration sugar solution used captively in the integrated manufacture of crocin syrup was not shown to be a distinct commodity fit for sale, so the Revenue's demand failed and the appeal was rejected.

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Issues: Whether the intermediate sugar solution cleared for captive consumption was liable to central excise duty on the ground that it was marketable.

Analysis: Liability to excise depends on the product being marketable or capable of being marketed. Mere capacity to last for some period, or the fact that the product answers a chemical description, does not by itself establish marketability. The evidence on record did not show that the sugar solution, having low concentration and used in the integrated manufacture of crocin syrup, was a distinct commodity capable of market sale. The absence of proof of marketability was fatal to the Revenue's demand.

Conclusion: The intermediate sugar solution was not shown to be marketable and was not liable to duty; the Revenue's appeal failed.

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