Marketability is essential for excisability: intermediate wool slivers failed the test and were not dutiable.

Carded gilled slivers of wool emerging at an intermediate stage of manufacture were held not to be excisable because marketability is an essential ingredient of excisability. The Tribunal applied the settled test that mere inclusion of an item in the tariff schedule does not by itself make it dutiable; the article must be a marketable commodity known in the market as goods. As the disputed intermediate product was found incapable of being marketed, it did not acquire the character of excisable goods, and the finding of classification and duty liability was set aside in favour of the assessee.

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Issues: Whether carded gilled slivers of wool emerging at an intermediate stage of manufacture were marketable goods and therefore excisable under Tariff Item 43.

Analysis: The item was held by the Revenue to fall within the tariff description on the basis of its composition and its emergence during the manufacture of semi-worsted yarn. The Tribunal noted, however, that the controlling test was not mere inclusion in the tariff but whether the article was a marketable commodity known to the market as goods. It followed the settled view taken by the High Courts, consistently approved by the dismissal of the revenue's special leave petition, that the product in question was incapable of being marketed and therefore did not acquire the character of excisable goods merely because it was mentioned in the tariff schedule.

Conclusion: The item was not marketable goods and was not excisable; the finding of classification and duty liability was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because marketability was held to be an essential ingredient for excisability and the disputed intermediate product failed that test.

Ratio Decidendi: Mere inclusion of an article in the tariff schedule does not make it excisable unless it is marketable goods.

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