Marketability is essential for excise duty; an intermediate slurry in soda ash manufacture was not a distinct excisable commodity.

Liability to central excise depends on whether the item is a marketable product known in the market as a separate, distinct and identifiable commodity. An impure, crude intermediate slurry arising in the continuous manufacture of soda ash was not shown to be known as sodium bicarbonate or otherwise marketable, and no contrary evidence established excisability. The product was therefore not liable to excise duty, and no duty demand could be raised in respect of it.

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Issues: Whether the intermediate product/slurry arising in the course of manufacture of soda ash was liable to central excise duty as a distinct excisable commodity.

Analysis: Liability to excise depends on manufacture of goods that are known in the market as separate, distinct and identifiable commodities. Marketability is an essential ingredient of excisability. On the materials placed, the product in question was an impure and crude intermediate arising in the continuous process of manufacture of soda ash, was not known in the market as sodium bicarbonate, and no contrary evidence was adduced to establish that it was a marketable commodity.

Conclusion: The product was not liable to excise duty and no demand could be made on the petitioner in respect of that product.

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