Commercial marketability test excludes pre-levy stock of untrimmed hardboard from new excise duty where it was already marketable.

Untrimmed hardboard in pre-levy stock was treated as not attracting the new excise duty where the product had already emerged as a commercially known and marketable commodity before the levy. The Tribunal applied the test whether the goods were manufactured and deliverable in their existing form, or whether trimming was only a later finishing step incidental to completion of the excisable product. On the facts, the assessee showed that untrimmed hardboard was being marketed as such before the levy, and the Department produced no contrary evidence. The new levy therefore did not apply to the pre-levy stock.

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Issues: Whether untrimmed hardboard lying in stock before the levy on hardboard became liable to excise duty merely because trimming was done after the levy.

Analysis: The applicable test was whether the goods were already manufactured and commercially marketable before the levy, or whether trimming was a necessary, incidental or ancillary process for completion of the excisable product. The Tribunal followed the principle that a product is liable once it has emerged as a commercially known and marketable commodity, even if some further finishing process is done later. The Department produced no evidence to rebut the assessee's material showing that untrimmed hardboard was being marketed as such and was in deliverable condition before the levy.

Conclusion: Untrimmed hardboard in pre-levy stock was not liable to the new excise levy, and the assessee succeeded.

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