Marketability of intermediate sugar syrup governs excisability; duty demand failed and matter was remanded for fresh determination.

Intermediate sugar syrup is not chargeable to excise duty unless it is shown to be marketable as such. The Department bears the burden of proving marketability, and the record here contained no finding establishing that the syrup manufactured by the appellants was marketable in its intermediate form. In the absence of such proof, references to circulars and observations on shelf life or sugar concentration were insufficient to sustain the duty demand. The matter was remanded to the adjudicating authority to determine marketability, and the appeals succeeded by way of remand.

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Issues: Whether sugar syrup arising at an intermediate stage of manufacture was excisable, and whether its marketability as such had been established.

Analysis: The question of duty depended on whether the intermediate product was marketable, since marketability is the relevant criterion for excisability. The record did not show that the sugar syrup manufactured by the appellants was marketable as such. The Department bore the burden of proving marketability, but no finding on that vital aspect was recorded. In the absence of such finding, the competing circulars and observations on shelf life and sugar concentration did not justify sustaining the duty demand.

Conclusion: The demand could not be sustained on the existing record. The matter was sent back to the adjudicating authority to ascertain whether the sugar syrup was marketable as such, and the appeals succeeded by way of remand.

Ratio Decidendi: An intermediate product is not chargeable to excise duty unless its marketability as such is established, and the burden to prove marketability lies on the Department.

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