Marketability is essential for excise levy; site-specific fabricated chimney components were not dutiable absent proof of saleability.

Fabricated chimney flues and other site-specific structural items made only for erection of a particular chimney were not treated as excisable goods because marketability was not proved. Mere correspondence, work order terms, or the fact that the items were manufactured for one customer did not establish that they had a market or were capable of sale as such. In the absence of evidence that the intermediate fabricated items were marketable goods, central excise duty could not be levied. The duty demand was therefore unsustainable, and the finding of excisability was set aside in favour of the assessee.

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Issues: Whether the fabricated chimney flues and structural items erected at site for a specific customer were dutiable as excisable goods, and whether marketability was established.

Analysis: The fabricated items were specially designed and manufactured only for erection of a particular chimney at site, and were not generic tubes or pipes of common use. Mere correspondence, work order terms, or the fact that the goods were made for one customer did not by itself establish marketability. The record did not show that the intermediate fabricated items had a market or were capable of sale as such. In the absence of proof of marketability, the goods could not be treated as excisable goods for levy of duty.

Conclusion: The duty demand was not sustainable and the finding of excisability was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because the fabricated chimney components were held not to have the requisite marketability for central excise levy.

Ratio Decidendi: Marketability is an essential condition for excise levy, and specially fabricated site-specific components for erection of an immovable structure are not dutiable absent proof that they are capable of sale in the market as goods.

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