Marketability of intermediate goods controls excise liability when Revenue cannot prove a commercially marketable form in the factory.

Sodium resinate arising in paper manufacture was treated as non-marketable and non-excisable because the Revenue did not prove that it emerged in a marketable form or was commercially known as such. The Tribunal followed its earlier batch decision on the same product, noting that a general technical extract was insufficient without specific pleadings or independent evidence showing marketability. On that basis, the duty demand and penalty were set aside.

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Issues: Whether sodium resinate arising during the manufacture of paper was a marketable and excisable commodity so as to justify the duty demand and penalty.

Analysis: The Tribunal had already examined the same product in a batch of paper-manufacturing cases and, after considering technical literature and trade materials, had held that sodium resinate does not emerge in a marketable stage and is not dutiable. The Revenue sought a different view on the basis of a general technical extract, but no such specific case was made in the appeal memo or show-cause notice, and no independent technical evidence was produced to show that the product emerging in the factory was the same commercially marketable material described in the extract. The prior Tribunal decision, having dealt with the same issue and having not been shown to be under challenge, was followed.

Conclusion: Sodium resinate was held not to be a marketable or excisable product in the facts of the case, and the demand and penalty were set aside.

Final Conclusion: The assessee succeeded and the Revenue's challenge failed, with the duty demand and penalty on the intermediate product being annulled.

Ratio Decidendi: An intermediate product in a manufacturing process is not dutiable unless the Revenue establishes, by relevant evidence, that it has emerged in a marketable form and is commercially known as such.

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