Marketability test for excise duty: incidental manufacturing waste was not dutiable because mere sale did not prove marketability.

Low boiling lumps arising incidentally during manufacture of phthalic anhydride were treated as waste, not as a manufactured excisable commodity, because the department failed to prove that they were marketable. The Tribunal applied the settled principle that mere sale, including sale driven by pollution concerns, does not by itself establish marketability for excise purposes. As marketability was not established, the product was held not dutiable and the duty demand was set aside.

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Issues: Whether low boiling lumps arising during manufacture of phthalic anhydride were marketable and hence dutiable.

Analysis: The Tribunal held that the material arose only as an incidental product during manufacture of phthalic anhydride and was sold because of pollution concerns. No evidence was produced by the department to show that it was a marketable commodity. Applying the settled principle that mere sale does not by itself establish marketability, the Tribunal treated the product as waste and not as a manufactured excisable commodity.

Conclusion: The low boiling lumps were not proved to be marketable and were not dutiable; the duty demand was unsustainable.

Final Conclusion: The appeal succeeded and the duty demand was set aside.

Ratio Decidendi: A product arising incidentally in manufacture is not liable to excise duty unless the department proves that it is marketable; mere sale is insufficient to establish marketability.

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