Marketability test defeats excise duty on hypo-solution used in film processing and its waste

Hypo-solution prepared from hypo-granules for use in developing cinematographic films, and the resulting waste, were not excisable goods because the product was found to be for instant use, of ephemeral character and having a short shelf life. The Department failed to rebut the finding that it was not marketable or to show that it could be repeatedly used and sold in the market as goods. Following the earlier Tribunal view on the same product, as affirmed by the Supreme Court, the material was held not liable to duty.

---

---

Issues: Whether hypo-solution prepared from hypo-granules for use in developing cinematographic films, and the waste of such hypo-solution, are excisable goods liable to duty.

Analysis: The product was found to be for instant use, of ephemeral character and having short shelf life. The Department failed to produce material to rebut the finding that the product was not marketable or to show that it could be repeatedly used and sold in the market as goods. The earlier Tribunal view on the same product, as affirmed by the Supreme Court, was followed.

Conclusion: Hypo-solution used for captive consumption and the waste of hypo-solution are not goods known to the market and are not liable to duty.

---