Classification of captively consumed sugar syrup failed without proof of fructose content and marketability, defeating the duty demand.

Sugar syrup captively consumed in making exempt biscuits was held not to be classifiable under sub-heading 17029090 on the material available. The lower authorities' classification failed because no chemical test established the product's precise fructose content, and the Revenue's circular on sugar syrup used for aerated water and ayurvedic medicines could not be applied without proof that the goods were identical. The Tribunal also relied on earlier authority requiring evidence of the requisite fructose content and marketability in the condition in which the goods emerged. On that basis, the duty demand was not sustainable.

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Issues: Whether sugar syrup captively consumed in the manufacture of exempt biscuits was classifiable under sub-heading 17029090 and liable to central excise duty.

Analysis: The classification adopted by the lower authorities was not supported by any chemical test establishing the precise fructose content of the product. The conclusion that the goods fell under sub-heading 17029090 was therefore unsustainable. The general CBEC circular relied upon by the Revenue was issued in the context of sugar syrup used for aerated water and ayurvedic medicines and could not be applied to the product in question without proof of identity. The earlier Tribunal decision on the same line of dispute held that, in the absence of evidence showing the required fructose content and marketability in the condition in which the goods emerged, duty could not be sustained.

Conclusion: The classification under sub-heading 17029090 and the duty demand were not sustainable, and the assessee succeeded.

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