Marketability is essential for excise duty on intermediate products; the department must prove excisability before levy can apply.

An intermediate product can be subjected to excise duty only if the department proves marketability, because marketability is an essential element of excisability. The department relied on chemical reports to claim that D2 Aminobutanol Hemitartrate was a distinct and stable compound, but the record did not show that marketability was established before the original authority. As the burden of proof was not discharged, the product was held not to be excisable and the Revenue's challenge failed.

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Issues: Whether the intermediate product, D2 Aminobutanol Hemitartrate, was excisable and marketable so as to attract classification under sub-heading 29.42.

Analysis: The department relied on chemical reports to contend that the product was a distinct, stable compound with a definite shelf life. The adjudicating authority, however, had found that the department had not discharged the burden of proving marketability, and the appellate record did not establish that the disputed test report formed part of the proceedings before the original authority. In excise law, marketability is an essential condition for levy on an intermediate product.

Conclusion: The product was not shown to be marketable and hence was not established to be excisable. The assessee succeeded and the Revenue's appeal failed.

Final Conclusion: The order holding the intermediate product outside the levy was affirmed, with the Revenue's challenge rejected.

Ratio Decidendi: An intermediate product cannot be subjected to excise duty unless the department proves that it is marketable; marketability is a necessary element of excisability.

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