Marketability test controls excise duty on intermediate goods despite tariff listing and captive consumption.

Excise duty on an intermediate product depends on whether the article is marketable or at least capable of being marketed as goods. Although resin at the 'A' stage, known as resols, was specified in the tariff and used captively in making laminated sheets, duty was not attracted because the material was unstable, semi-processed and required controlled conditions or stabiliser to survive. Captive consumption alone did not create excisability, and the tariff entry could not displace the basic marketability requirement. The stated conclusion is that resols at the 'A' stage were not exigible to excise duty because marketability was not established.

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Issues: Whether resin at 'A' stage, chemically known as 'resols', produced in the course of manufacture and captively consumed in the manufacture of laminated sheets, was exigible to excise duty despite being specified in the tariff and despite the absence of actual sale.

Analysis: The Act fastens duty on excisable goods produced or manufactured, but the concept of manufacture is linked to the existence of goods that are distinct, usable, movable and marketable. Goods specified in the tariff do not attract duty unless they answer the test of marketability or are at least capable of being marketed. The intermediate resin solution here was unstable, required stabiliser or controlled conditions to survive, and was used in semi-processed form in a continuous process of manufacture; captive consumption by itself did not create dutiability. The tariff entry for resols could not override the basic requirement that the article must be marketable or capable of being marketed.

Conclusion: Resin at 'A' stage, i.e. resols, was not exigible to duty because it was not shown to be marketable or capable of being marketed.

Ratio Decidendi: Even if an intermediate product is specifically mentioned in the tariff, excise duty is not attracted unless the article is marketable or capable of being marketed as goods.

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