Marketability of compounded rubber upheld for excise purposes where evidence showed shelf life and capability of sale.

Compounded rubber falling under Heading 40.05 was treated as marketable and therefore excisable during the disputed period because the laboratory reports and oral evidence showed the samples were compounded rubber with no apparent deterioration and sufficient shelf life. The objection that the retest used different samples was rejected on the record, and the claims based on trade secrecy, non-sale, and alleged unsuitability for other manufacturers were unsupported. Transportation of the product between units further indicated that it could be bought and sold in the market, so the duty demand was sustained. For an intermediate product covered by the tariff, excisability depends on marketability, including capability of sale even when captively consumed.

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Issues: Whether compounded rubber falling under Heading 40.05 of the Central Excise Tariff Schedule was marketable and therefore excisable during the disputed period.

Analysis: The product was admittedly compounded rubber covered by the relevant tariff entry. Chemical test and retest reports found the samples to be compounded rubber and to show no apparent sign of deterioration. The evidence from the laboratory and the oral examination of the Chemical Examiner supported the finding that the product had sufficient shelf life. The plea that the retest was conducted on different samples was rejected, as the record showed that the analysis related to the samples drawn from the factories. The arguments based on trade secrecy, non-sale, and functional unsuitability for other manufacturers were not supported by evidence. The record also showed transportation of the product between units, which reinforced its capability of being bought and sold in the market.

Conclusion: The compounded rubber was marketable and excisable, and the demand of duty was sustainable.

Ratio Decidendi: For an intermediate product specifically covered by the tariff, excisability depends on marketability, which may be established by evidence of shelf life and capability of being bought and sold, even if the product is captively consumed.

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