Marketability test for intermediate products: sugar syrup in aerated water manufacture was treated as non-excisable.

Intermediate sugar syrup arising in the manufacture of aerated water was treated as non-excisable because it had not reached the stage of marketability. The Tribunal relied on the factual finding that the syrup was not being marketed and on a Board circular stating that such in-process material remains an intermediate combination of materials rather than a marketable product. On that basis, the duty demand could not be sustained, since excise liability depends on the product attaining marketable status before it can fall within the charging net.

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Issues: Whether sugar syrup emerging as an intermediate product in the manufacture of aerated water is excisable.

Analysis: The question turned on whether the intermediate sugar syrup had reached the marketability stage. The Tribunal noted that the authorities had found it was not being marketed and that a Board circular dated 25-7-1989 stated that sugar syrup arising in the intermediate stage of aerated water manufacture was an in-process combination of materials that did not reach the marketable stage.

Conclusion: Sugar syrup in the intermediate stage was held not excisable. The appeal was allowed.

Final Conclusion: The demand could not be sustained because the intermediate product was treated as non-marketable and therefore outside the charging net.

Ratio Decidendi: An intermediate product is not excisable unless it has reached the stage of marketability.

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