Marketability test governs excise duty on captive cream used in biscuit manufacture; inadequate evidence led to remand.

Cream captively consumed in biscuit manufacture was held not to be liable to central excise duty on the present record because marketability was not adequately proved. The analysis stressed that actual sale is not required, but the Department still had to show that the intermediate cream was capable of being bought and sold, with evidence on shelf-life, storage, trade availability, or recognition in the market. Separate fixation of job charges for cream and biscuits was insufficient by itself to establish marketability. The duty finding was therefore set aside for lack of evidence, and the matter was remanded for fresh consideration.

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Issues: Whether the cream manufactured and captively consumed in the manufacture of biscuits was liable to central excise duty on the basis of marketability.

Analysis: The dispute turned on whether the intermediate cream product answered the test of marketability so as to attract levy under central excise law. The lower authorities relied on the general principle that actual sale is not necessary, but there was no detailed examination of the specific product's shelf-life, storage capability, market availability, or evidence that such cream was known in trade. The fact that job charges were separately fixed for cream and biscuits did not, by itself, establish that the cream was marketable. In matters of captive consumption, the Department was required to support the levy with evidence showing that the product was capable of being bought and sold in the market.

Conclusion: The finding of duty liability was set aside for want of adequate evidence on marketability, and the matter was remanded for fresh consideration.

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