Marketability governs excise duty on intermediate products arising during IMFL manufacture; wort was not dutiable

Malt extract or wort arising during manufacture of IMFL is not liable to excise duty under Chapter 19 unless it is shown to be a marketable excisable commodity. The Tribunal applied its earlier view that the intermediate product at that stage was wort and lacked marketability, so the duty demand could not be sustained. The operative principle is that a product emerging in the manufacturing process becomes excisable only when it is demonstrably marketable as such.

---

---

Issues: Whether malt extract or wort arising during the manufacture of IMFL is a marketable excisable commodity liable to duty under Chapter 19 of the Central Excise Tariff Act, 1985.

Analysis: The demand was founded on the premise that the malt extract obtained during the manufacturing process was a marketable commodity and therefore excisable. The Tribunal followed its earlier decision on the same issue, which had held that the product emerging at that stage was wort and that it was not a marketable commodity. On that basis, the duty demand could not be sustained.

Conclusion: The malt extract or wort was not liable to duty as an excisable commodity.

Ratio Decidendi: A product arising in the manufacturing process is not liable to excise duty unless it is shown to be a marketable excisable commodity.

---