Marketability remains essential for excise duty on captive intermediate products used in belt manufacture.

Friction cloth produced at an intermediate stage in the manufacture of belts was held not chargeable to central excise duty because it was captively consumed and was found not to be marketable on the basis of market enquiry. A specific tariff entry did not eliminate the statutory requirement of marketability, and the view that marketability was irrelevant under the tariff was rejected. The assessee therefore succeeded, and no duty was payable on the intermediate product.

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Issues: Whether friction cloth arising at an intermediate stage in the manufacture of belts was liable to central excise duty.

Analysis: The product was used captively in the manufacture of the final belts. The finding that it was not marketable was based on market enquiry and remained unshaken. A specific tariff entry by itself did not dispense with the requirement of marketability, and the view that marketability was irrelevant under the tariff was not sustainable.

Conclusion: Friction cloth was not liable to duty and the assessees succeeded.

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