Marketability test for intermediate goods: incomplete assemblies requiring further processing were held non-excisable.

Intermediate goods cleared after job work were not excisable because they consisted only of partially populated enclosures and incomplete systems meant for further processing by the principal manufacturer. Applying the settled test of marketability, the goods had to be capable of sale in the condition in which they emerged, and Revenue failed to show commercial identity or marketability without further processing. The incomplete assemblies therefore did not satisfy the test of excisability at the stage of clearance, and the duty demand was unsustainable.

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Issues: Whether the goods cleared after job work were marketable and therefore excisable, and whether duty could be demanded on such intermediate goods.

Analysis: The goods cleared by the appellant consisted only of partially populated enclosures and incomplete systems meant to be returned to the principal manufacturer for further processing and completion. Applying the settled test of marketability, the goods must be capable of being sold in the condition in which they emerge. Revenue did not produce material to show that the incomplete goods had commercial identity or were capable of being marketed without further processing. The photographs and record showed only incomplete assemblies, not finished products.

Conclusion: The goods failed the test of marketability and could not be treated as excisable goods at the stage of clearance from the appellant's factory. The duty demand was unsustainable and the appeal succeeded.

Ratio Decidendi: Intermediate goods are dutiable only if, in the form in which they emerge, they are marketable and commercially identifiable; incomplete articles requiring further processing are not excisable absent proof of marketability.

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