Marketability test for captive intermediate goods: non-marketable resins were treated as non-excisable and not dutiable.

Intermediate urea formaldehyde resin and phenol formaldehyde resin captively consumed in the factory were treated as non-excisable because they were not marketable and therefore did not answer the description of excisable goods. The note applies the same reasoning used in earlier matters involving the same assessee and links excisability to marketability of the intermediate product. On that basis, the resins were stated to be not dutiable, and the impugned orders were set aside.

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Issues: Whether urea formaldehyde resin and phenol formaldehyde resin manufactured as intermediate products and captively consumed in the factory were excisable and dutiable.

Analysis: The Tribunal accepted the plea that the intermediate products were not marketable and therefore did not answer the description of excisable goods. It followed its earlier decisions in the same assessee's own matters and applied the same reasoning to the present dispute involving captive consumption of the resins.

Conclusion: The intermediate products were held to be non-excisable and not dutiable.

Final Conclusion: The impugned orders were set aside and the appeal succeeded.

Ratio Decidendi: Intermediate products that are not marketable and are captively consumed are not excisable goods and cannot be subjected to duty.

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