Marketability must be proved by evidence before excisability is sustained; unsupported tariff reference was insufficient and remand followed.

Mere inclusion of an intermediate product in the tariff schedule does not by itself establish excisability unless marketability is proved on evidence. The record contained expert opinions and dealer letters relevant to marketability and shelf life, but the adjudicating order did not properly examine that material or meet the assessee's evidence. The limitation plea was also not considered in sufficient depth. The order was therefore found infirm for non-application of mind, and the demand and penalty were set aside with the matter remanded for de novo adjudication after fresh consideration of the evidence and limitation issue.

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Issues: Whether the demand and penalty relating to the alleged intermediate products could be sustained without proper examination of marketability, shelf life, the evidence adduced by the assessee, and the plea of limitation, and whether the matter required remand for fresh adjudication.

Analysis: The record showed substantial evidence from the assessee, including expert opinions and dealer letters, bearing on whether the intermediate products were known in the market and were capable of being marketed. The order under challenge did not adequately consider this material, and the department had not produced sufficient evidence to establish marketability merely by reference to the tariff description. The plea of time bar also had not been examined in sufficient depth. The order was therefore found to suffer from infirmity and non-application of mind, warranting interference.

Conclusion: The demand and penalty were not finally upheld, and the matter was remanded to the original authority for de novo adjudication after proper consideration of the evidence and the limitation plea.

Final Conclusion: The adjudication was set aside and returned for fresh decision in accordance with law after giving both sides an opportunity to place and test the evidence.

Ratio Decidendi: Mere reference to a product in the tariff schedule is not by itself sufficient to establish excisability unless the department proves marketability on evidence.

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