Excise classification and marketability of captive-use sugar syrup depend on proof of product identity, test results, and actual marketability.

For excise classification of sugar syrup used for captive consumption, the tariff entry under sub-heading 17029090 applied only if the product satisfied the stated fructose-content description; without a departmental chemical test or other proof establishing that threshold, the classification could not be sustained. Excisability also depended on proof that the specific product was marketable in the condition in which it emerged, and marketability could not be inferred merely from sales of similar invert sugar syrup by another manufacturer. The exemption discussion under Notification No. 67/95-CE was rejected on the facts stated, as the proviso was treated as confined to cases involving common Cenvat-credit inputs used for both dutiable and exempted final products after Rule 6 compliance.

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Issues: (i) Whether the sugar syrup manufactured for captive use was correctly classified under sub-heading 17029090 of the Central Excise Tariff Act, 1985. (ii) Whether the sugar syrup was marketable in the form in which it emerged so as to attract central excise duty, and whether exemption under Notification No. 67/95-CE was available.

Issue (i): Whether the sugar syrup manufactured for captive use was correctly classified under sub-heading 17029090 of the Central Excise Tariff Act, 1985.

Analysis: The classification under sub-heading 17029090 depended on the product answering the description of sugar syrup blends containing in dry stage 50% by weight of fructose. The appellants disputed that the fructose content reached that threshold and relied on a laboratory report supporting their stand. No finding was recorded on that factual plea, and no chemical test by the Department was shown to establish the requisite fructose content. Mere earlier payment of duty by the appellants could not substitute for proof of correct classification.

Conclusion: The classification under sub-heading 17029090 was not sustainable.

Issue (ii): Whether the sugar syrup was marketable in the form in which it emerged so as to attract central excise duty, and whether exemption under Notification No. 67/95-CE was available.

Analysis: Marketability had to be established for the very product manufactured by the appellants in the condition in which it emerged. The finding of marketability was based only on sales of similar invert sugar syrup by another manufacturer, without proving identity with the appellants' product or subjecting the goods to the necessary chemical test. That approach was impermissible. The plea based on Notification No. 67/95-CE was also rejected, as the proviso was held to apply only where common Cenvat credit availed inputs were used to manufacture both dutiable and exempted final products and the Rule 6 obligation had been discharged in that context.

Conclusion: Marketability was not proved, and duty could not be sustained on that basis; the exemption plea failed on the facts stated.

Final Conclusion: The duty demand and connected penalties were set aside, and the appeals succeeded with consequential relief.

Ratio Decidendi: For excisability, the Department must prove that the specific product manufactured answers the tariff description and is marketable in the condition in which it emerges; marketability cannot be presumed from sales of similar goods made by another manufacturer.

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