Marketability of intermediate rubberised fabric determines central excise liability for footwear manufacture.

Intermediate rubberised fabric used in footwear manufacture was treated as a distinct commodity with commercial identity, and the decisive test was marketability under central excise law. The product was found capable of being stored, transported, sent for job work and returned for further use, so short shelf life did not by itself defeat excisability. Actual sale was not necessary because capability of being brought to market was sufficient. The argument that vulcanisation was required at the intermediate stage was rejected on the facts considered. The material was therefore held marketable and excisable, while questions of limitation, exemption and penalty were left for rehearing.

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Issues: (i) Whether the double textured rubberised fabric or unvulcanised sandwiched fabric emerging in the manufacture of footwear was marketable and hence excisable under the Central Excise law.

Issue (i): Whether the double textured rubberised fabric or unvulcanised sandwiched fabric emerging in the manufacture of footwear was marketable and hence excisable under the Central Excise law.

Analysis: The product emerged as a distinct intermediate commodity from the process of mixing rubber compound and applying it between two textile layers. The decisive test was marketability, namely whether the goods were capable of being brought to the market and bought or sold in the ordinary course of trade. The majority held that short shelf life did not, by itself, negate marketability, particularly where the material was capable of being stored, transported, sent for job work, and returned for further use. Reliance was placed on the earlier Calcutta High Court decision in the assessee's own case, which treated similar processed sheets as vendible, and on the principle that actual sale is not essential if the product is capable of being marketed. The contention that vulcanisation was necessary at the stage of the intermediate fabric was rejected as irrelevant to the levy question on the facts of the case.

Conclusion: The product was held to be marketable and excisable; this issue was decided against the assessee and in favour of Revenue.

Final Conclusion: The appeal failed on the merits of excisability because the intermediate rubberised fabric was treated as a marketable excisable product, while the questions of limitation, exemption and penalty were left for rehearing.

Ratio Decidendi: An intermediate product is liable to central excise if it has a distinct commercial identity and is capable of being marketed, and short shelf life or captive use does not by itself negate marketability.

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