Marketability of captive-use perfumery compound and prima facie limitation drove partial stay relief

A Tribunal note on excise stay relief held that captive use of a perfumery compound does not, by itself, disprove marketability; the assessee had not prima facie shown that the product was incapable of being bought or sold in the ordinary course of trade, so full waiver on that ground was not justified. It also treated the pre-November 2007 portion of the demand as prima facie time-barred on the surrounding facts, which supported partial relief. The result was rejection of complete waiver, with substantial interim relief through partial pre-deposit and waiver of the balance pending appeal.

---

---

Issues: (i) Whether the perfumery compound manufactured and used captively for further manufacture was, prima facie, a marketable and excisable product; (ii) Whether the period prior to November 2007 appeared to be barred by limitation for the purpose of waiver consideration.

Issue (i): Whether the perfumery compound manufactured and used captively for further manufacture was, prima facie, a marketable and excisable product.

Analysis: The Board circular relied upon by the assessee exempted only such odoriferous compounds as were not capable of being bought or sold in the market in the normal course of trade. The Tribunal drew a distinction between a product that is incapable of being marketed and a product that is merely used exclusively in the assessee's own manufacturing process. Exclusive captive use, by itself, was held not to establish absence of marketability, especially where the record did not show that this specific case had been clearly pleaded and proved before the adjudicating authority.

Conclusion: Prima facie, the assessee failed to establish that the compound was not marketable or not excisable, so full waiver was not warranted on this ground.

Issue (ii): Whether the period prior to November 2007 appeared to be barred by limitation for the purpose of waiver consideration.

Analysis: The demand covered the period from 1 April 2007 to 31 March 2008, while the show-cause notice was issued on 11 November 2008. In view of the surrounding circumstances and the prior course of proceedings, the Tribunal found that the earlier part of the period appeared, prima facie, to be time-barred and that this factor supported partial relief.

Conclusion: Prima facie, the period prior to November 2007 appeared barred by limitation, supporting a partial waiver.

Final Conclusion: The application for complete waiver was rejected, but substantial interim relief was granted by directing a partial pre-deposit and waiving the balance pending disposal of the appeal.

---