Tribunal rules in favor of company on duty liability for sugar syrup

The Tribunal allowed the appeal, ruling in favor of the company regarding duty liability on sugar syrup used within their factory for production. The Tribunal found that the sugar syrup, with less than 65% sugar concentration, was not a marketable commodity based on CBEC Circulars. As the Revenue failed to prove marketability with evidence, the sugar syrup was deemed non-marketable and exempt from duty. The Tribunal emphasized the binding nature of CBEC Circulars on the Revenue, leading to the decision in favor of the appellant.

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Issues:
Duty liability on sugar syrup manufactured and used within the factory of production.

Analysis:
The appeal was filed by a company regarding the demand on sugar syrup manufactured and consumed within their factory. The company argued that the sugar syrup, with a concentration of less than 65% sugar, used in the production of products like Mangola and aerated water should not be subject to duty. They cited CBEC Circulars and previous decisions to support their claim. The company emphasized that the sugar syrup was not a marketable commodity and should be exempt from duty based on specific notifications. They contended that the burden of proof regarding marketability rested on the Revenue, which failed to provide evidence supporting their claim.

The Revenue, represented by the Assistant Commissioner, relied on the impugned order and previous Tribunal decisions to support the duty liability on the sugar syrup. They argued that the sugar syrup, when used in the manufacture of certain food products, should be considered a marketable product subject to duty.

The Tribunal examined the issue in light of various CBEC Circulars, starting from 1989 up to 2004, which discussed the marketability of sugar syrup based on factors like sugar concentration and shelf life. The Circulars clarified that sugar syrup with a concentration of 65% by weight of sugar would be considered marketable unless proven otherwise. In this case, as the sugar syrup's sugar concentration was less than 65% and no evidence of marketability was provided by the Revenue, the Tribunal ruled in favor of the appellant. The Tribunal emphasized that the Circulars issued by CBEC were binding on the Revenue, and since no evidence was presented to prove marketability, the sugar syrup was deemed non-marketable and not liable to duty.

Therefore, based on the analysis of the arguments presented by both parties and the relevant CBEC Circulars, the Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant regarding the duty liability on the sugar syrup used in their factory for production purposes.

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