Marketability is essential for excise duty: captive unvulcanised friction cloth was not dutiable as distinct goods.

Unvulcanised friction cloth used captively in the manufacture of belts was held not to be marketable goods with an independent commercial identity. Excise duty was attracted only if the article was goods in the commercial sense and known to the market as a distinct product; mere inclusion in the tariff description did not make it dutiable. As the material was an intermediate, transient, and captive-consumed product not generally marketed, marketability was absent and the classification under Tariff Item No. 19-I(b) was unsustainable.

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Issues: Whether unvulcanised friction cloth, used captively in the manufacture of belts, was marketable goods and therefore classifiable as dutiable under Tariff Item No. 19-I(b) of the Central Excise Tariff.

Analysis: Excise duty is attracted only when the article is goods in the commercial sense and is known to the market as a distinct product. The material in question was found to be an intermediate, transient and captively consumed product used only in the manufacture of belts. The record showed that it was not generally marketed and had no independent commercial identity. In such circumstances, mere inclusion of a description in the tariff entry did not by itself render the article dutiable, because marketability is an essential ingredient of excisability.

Conclusion: The unvulcanised friction cloth was not dutiable under Tariff Item No. 19-I(b) and the classification adopted by the department was unsustainable.

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