Marketability as a condition for excisability prevented central excise duty on unmarketable intermediate chemical solutions.

Chemical solutions used to impregnate paper and fabric were treated as intermediate products in the manufacture of laminated boards, but excise liability depended on marketability. On the facts found, the department failed to prove that the phenol-formaldehyde or melamine-formaldehyde solutions were capable of being marketed. As marketability is a sine qua non for excisability, an intermediate product with limited shelf life and no proven market cannot be treated as excisable goods. The solutions were therefore not liable to central excise duty, and the assessee's position was upheld.

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Issues: Whether the chemical solutions used for impregnating paper and fabric were excisable goods liable to central excise duty.

Analysis: The chemical solutions in question were intermediate products used in the manufacture of laminated boards. Their duty liability depended on whether they were marketable, since marketability is an essential element for treating an item as excisable goods. On the facts found, the department failed to establish that either the phenol-formaldehyde solution or the melamine-formaldehyde solution was capable of being marketed. The decision relied on the principle that an intermediate product having only limited shelf life and not shown to be marketable does not satisfy the goods test for excise levy.

Conclusion: The solutions were not excisable goods and were not liable to duty; the assessee's position was upheld and the Revenue's appeals failed.

Final Conclusion: Liability to central excise duty did not arise because the essential requirement of marketability was not proved.

Ratio Decidendi: Marketability is a sine qua non for excisability, and an intermediate product not shown to be capable of being marketed cannot be subjected to central excise duty.

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