Marketability of captive sugar syrup not proved, so excise duty demand on the intermediate product failed.

Sugar syrup manufactured within the factory and captively consumed in biscuit production was held not liable to central excise duty because the department failed to prove that it was marketable in the form in which it emerged. The Tribunal relied on earlier decisions treating captive-use sugar syrup as non-excisable absent evidence of marketability. On the facts, the revenue did not dislodge the assessee's contention that the intermediate product was not marketable, so the duty demand could not be sustained and the appeal was allowed in favour of the assessee.

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Issues: Whether sugar syrup manufactured within the factory and captively consumed in the manufacture of biscuits was liable to central excise duty as a marketable intermediate product.

Analysis: The demand rested on the premise that the sugar syrup was marketable and therefore excisable. The Tribunal found no evidence from the department to establish marketability of the syrup in the condition in which it emerged. The matter was treated as covered by earlier Tribunal decisions holding that sugar syrup used captively in biscuit manufacture, without proof of marketability, could not be subjected to duty. On the facts, the department failed to dislodge the appellant's contention that the product was not marketable.

Conclusion: The intermediate sugar syrup was not shown to be marketable and was not liable to excise duty; the demand could not be sustained and the appeal was allowed in favour of the assessee.

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