Marketability evidence is essential for excise duty on captive intermediate goods; unsupported data cannot sustain demand or penalty.

Intermediate resins/glue used captively were not dutiable because the department failed to establish marketability with credible evidence; unsupported website data, unverified product comparisons, and no reliable proof of chemical composition or shelf-life were insufficient. The Tribunal also accepted the binding clarification of the Ministry of Chemicals and Fertilizers and found that the adhesive product was not shown to fall within Chapter 39 as alleged. For the same reasons, the penalty under Section 11AC could not survive, and the duty demand and penalty were set aside.

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Issues: Whether the intermediate resins/glue manufactured by the appellant for captive consumption were dutiable on the ground of marketability and whether the duty demand and penalty were sustainable.

Analysis: The Tribunal followed its earlier decision in the appellant's own case for the prior period and held that the demand rested on unsubstantiated website data and no reliable evidence of comparable products, chemical composition, or shelf-life comparison had been produced. The conclusion that the goods were marketable was therefore not supported. The Tribunal also noted that the clarification of the Ministry of Chemicals and Fertilizers was binding, and that the glue manufactured for use as adhesive was not shown to fall within Chapter 39 in the manner alleged by the department. On the same reasoning, the penalty imposed under Section 11AC could not survive.

Conclusion: The resins/glue were held not liable to duty, and the duty demand and penalty were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded by application of the coordinate Bench ruling in the appellant's own case, with consequential relief from the confirmed demand and penalty.

Ratio Decidendi: Excise duty on an intermediate product cannot be sustained unless the department establishes marketability with credible evidence; unsupported website references and unverified comparisons are insufficient to fasten duty or penalty.

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