2018 (11) TMI 66 - AT - Central Excise

Classification of sugar syrup for Central Excise Duty exemption based on marketability criteria.

The Tribunal allowed the appeal, ruling in favor of the appellant in the classification of sugar syrup for Central Excise Duty exemption. The decision ... Intermediate goods - sugar syrup - N/N. 67/1995-CE dated 16.03.1995 - excisability/marketibility - demand of Central Excise duty on intermediate product ‘sugar syrup’ captively consumed in the manufacture of biscuits - Held that:- Tribunal in the said case of M/s Bhagwati Food Pvt. Ltd. and others [2016 (9) TMI 678 - CESTAT ALLAHABAD] held that, there was no evidence to prove that sugar syrup captively consumed is classifiable under Tariff Item No. 17029090 nor there is any evidence to prove that the goods in question in the form in which they come into existence in the appellants’ factory are marketable and finally held that Sugar syrup coming into existence during the manufacture of biscuits was not attracting Central Excise duty. Sugar syrup coming into existence during the manufacture of biscuits and captively consumed does not attract Central Excise duty for the reason that there is no evidence that the same is marketable - appeal allowed - decided in favor of appellant. Issues:Classification of sugar syrup for Central Excise Duty exemption under Notification No.67/1995-CE and Notification No.22/2007-CE.Analysis:The appeal addressed the classification of sugar syrup for Central Excise Duty exemption under Notification No.67/1995-CE and Notification No.22/2007-CE. The appellant, a biscuit manufacturer, used sugar syrup as an intermediate product, which was considered classifiable under Tariff Item No.17029090. Initially, the appellant's final products attracted Central Excise Duty at 8% ad-valorem, exempting intermediate products from payment under Notification No.67/1995-CE. However, post 03.05.2007, goods with an MRP below Rs. 100/kg were exempted under Notification No.22/2007-CE, rendering the benefit of Notification No.67/1995-CE for sugar syrup inapplicable. Consequently, a show cause notice was issued demanding Central Excise duty on sugar syrup captively consumed in biscuit manufacturing, leading to confirmation of demands in the Order-in-Original.The appellant appealed to the Learned Commissioner (Appeals) following which the Order-in-Appeal upheld the Order-in-Original, prompting the appellant to approach the Tribunal. The appellant cited precedents, including a Final Order by the Tribunal in a similar case, to support their claim. The Tribunal considered these submissions along with the record and found that there was no evidence to prove that sugar syrup captively consumed was classifiable under Tariff Item No.17029090 or marketable in its existing form. Relying on a prior decision involving Rishi Bakers Pvt. Ltd., the Tribunal concluded that sugar syrup during biscuit manufacturing did not attract Central Excise duty due to lack of marketability evidence. Consequently, the appeal was allowed, granting the appellant consequential benefits as per the law.In conclusion, the Tribunal's judgment clarified the classification of sugar syrup for Central Excise Duty exemption under relevant notifications. The decision emphasized the importance of marketability in determining duty liability, ultimately ruling in favor of the appellant based on the lack of evidence supporting the imposition of Central Excise duty on sugar syrup used in biscuit production.