Marketability is essential for excisability: nitrogen dioxide from nitric acid manufacture was not proved marketable, so duty failed.

Nitrogen dioxide emerging during manufacture of nitric acid was held not to be excisable because marketability was not proved. The authorities found no evidence that the product was capable of commercial sale, and that finding was not specifically challenged. Its emergence in a continuous manufacturing process was insufficient by itself to establish marketability, and the product's description and shipping or use characteristics did not show marketable status. As marketability is a necessary condition for excisability, duty could not be levied on the product. The appeal was dismissed.

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Issues: Whether nitrogen-di-oxide emerging during manufacture of nitric acid was marketable and therefore excisable.

Analysis: The lower authorities had found that the department produced no evidence to show that the product was marketable. That finding was not specifically challenged. The fact that the product arose in a continuous process was held insufficient by itself to establish marketability. The description of nitrogen dioxide and its shipping and use characteristics did not show that it was marketable in the relevant sense.

Conclusion: The product was not proved to be marketable and was not excisable; the appeal was dismissed.

Ratio Decidendi: Marketability is a necessary condition for excisability, and where the department fails to prove marketability, duty cannot be levied even if the product emerges in a continuous manufacturing process.

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