Marketability test excludes captive intermediate dip solution from excise duty under the tariff.

Resorcinol formaldehyde latex dip solution manufactured and captively consumed in the factory was held not to be marketable goods for excise purposes. The Court applied the principle that tariff duty attaches only to goods capable of being bought and sold, and found that the solution was prepared for immediate tyre cord dipping, had a very short usable life, could not be preserved without stabilisers, and was not shown to have any real market. It was treated as an in-process intermediate used by the manufacturer itself, so it did not fall within Tariff Item 15A(1) and no excise duty was leviable.

---

---

Issues: Whether the resorcinol formaldehyde latex dip solution manufactured and captively consumed in the factory was marketable goods and liable to excise duty under Tariff Item 15A(1).

Analysis: The dip solution was prepared for immediate use in tyre cord dipping, had a very short usable life, and on the evidence could not be preserved without stabilisers. The material was not shown to be sold, nor was there satisfactory evidence of any market for it. The Court applied the principle that excise duty under the tariff is attracted only to goods that are marketable or capable of being bought and sold, and distinguished authorities relied upon by the department on the facts. The evidence established that the product was only an in-process intermediate material used by the petitioner itself and would spoil quickly.

Conclusion: The dip solution was not marketable goods and did not fall within Tariff Item 15A(1); excise duty was not leviable on it.

Ratio Decidendi: A captive intermediate product with no proven marketability and no commercial shelf life is not excisable as goods under the tariff.

---