Captively consumed sugar syrup was treated as dutiable intermediate goods, with exemption denied under the applicable notification.

Captively consumed sugar syrup used in manufacturing mango, orange and pineapple pulp was treated as a marketable intermediate product liable to central excise duty. The exemption under Notification No. 217/86-C.E. was found unavailable because the final products were cleared under the small scale exemption, and the duty liability on the syrup was sustained under tariff sub-heading 1702.30. The document states that the captively consumed sugar syrup was dutiable and the appeal failed.

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Issues: Whether sugar syrup captively consumed in the manufacture of mango pulp, orange pulp and pineapple pulp was liable to central excise duty and whether the appellant could claim the benefit of the exemption notifications.

Analysis: The product was treated as a marketable intermediate product. Since the final products were cleared under the small scale exemption, the exemption under Notification No. 217/86-C.E. was held unavailable. The duty liability on the captively consumed sugar syrup was therefore sustained under tariff sub-heading 1702.30.

Conclusion: The sugar syrup was held to be dutiable and the appeal failed.

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