Marketability remains essential for excisability of EPDM rubber tubing; inadequate evidence required fresh consideration of duty liability.
Marketability remains an essential ingredient for excisability of EPDM rubber tubing; mere captive consumption does not by itself prove that the product was incapable of being marketed. On the existing record, the Department had not shown actual marketability or conducted a proper market enquiry, so the Collector's order dropping the demand could not stand. The dispute was therefore sent back for fresh consideration de novo on marketability and duty liability.
Issues: Whether EPDM rubber tubing of unhardened vulcanised rubber was dutiable excisable goods under the relevant tariff entry in the absence of evidence that it was marketable or capable of being marketed, and whether the matter required remand for fresh consideration.
Analysis: The majority proceeded on the basis that mere captive consumption does not by itself establish that a product is not marketable, and that marketability remains an essential ingredient for excisability. At the same time, it was found that the record did not contain adequate evidence of actual marketability or any market enquiry by the Department. The material also showed that the product had been described as tubing falling within the tariff description, but the question whether it was in fact marketable had not been properly established on the existing record. In these circumstances, the Collector's order dropping the demand could not stand without a fuller examination of the marketability issue and the relevant factual material.
Conclusion: The product was not finally held liable to duty on the existing record, and the matter was required to be reconsidered de novo.
Final Conclusion: The appeal succeeded to the extent that the Collector's order was set aside and the dispute was sent back for fresh adjudication on marketability and excisability.
Ratio Decidendi: For excise liability, a product must be shown to be marketable or capable of being marketed, and where the existing record does not adequately establish that fact, fresh consideration is required.
TaxTMI 
AI Drafter ✕
TaxTMI 
