Tribunal rules carbon dioxide from factory not excisable due to lack of marketability

The Tribunal dismissed the Revenue's appeal, affirming that the carbon dioxide generated during fermentation in the factory was not marketable and therefore not excisable. The decision emphasized the necessity for goods to be proven marketable in the form they are cleared for captive use, a requirement not met in this case due to the impurities present in the carbon dioxide. The Tribunal's ruling was based on the lack of evidence of purification in the respondent's unit, distinguishing the carbon dioxide generated internally from that purchased commercially.

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Issues:
1. Whether carbon dioxide generated during fermentation process in the factory is marketable and excisable.

Analysis:
1. The case involved a dispute regarding the marketability and excisability of carbon dioxide generated during the fermentation process in the factory of the respondent, a beer manufacturer. The department contended that the carbon dioxide was marketable as it was used for carbonation of beer and hence attracted central excise duty. The Tribunal referred to previous judgments in similar cases to determine the marketability of the carbon dioxide.

2. The Tribunal considered the arguments presented by both sides. The department argued that the carbon dioxide generated in the factory was of the same character as the one purchased from outside, making it marketable. They also alleged suppression of relevant facts by the appellant. On the other hand, the respondent argued that the carbon dioxide generated in their factory had impurities and required purification for marketability, which was not done in their unit.

3. The Tribunal analyzed the facts and legal precedents. They noted that the carbon dioxide generated during fermentation process contained impurities like methane and alcohol, which needed purification for marketability. Since there was no evidence of a purification plant in the respondent's unit, the marketability of the carbon dioxide was not proven. The Tribunal held that the carbon dioxide purchased from commercial manufacturers differed from that generated in the factory, making it non-marketable without purification.

4. Ultimately, the Tribunal dismissed the Revenue's appeal, upholding the order that the carbon dioxide generated in the factory during fermentation was not marketable and hence not excisable. The cross-objection was also disposed of accordingly. The decision was based on the principle that goods must be proven marketable in the form they are cleared for captive use, which was not established in this case.

This detailed analysis of the judgment highlights the key arguments, legal principles, and the Tribunal's decision regarding the marketability and excisability of carbon dioxide generated during the fermentation process in the factory.

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