Marketability of intermediate textile products defeated excise duty where processed fabric was not a distinct commercial commodity.

Processed piled acrylic fabrics in running length were held not to be marketable as a distinct commercial commodity, because the record did not show that the intermediate product was understood in trade or possessed independent character as goods. Applying the same principle used in the comparable processed knitted fabrics matter, the article had already acquired the essential characteristics of blankets, so the intermediate stage could not be treated as excisable merely because it could later be cut into blankets. Classification under Heading 60.01 and the duty demand therefore failed, and the assessee's non-liability remained undisturbed.

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Issues: Whether piled acrylic fabrics (processed) in running length were marketable goods chargeable to duty and classifiable under Heading 60.01 of the Central Excise Tariff Act, 1985, or whether they fell under Heading 63.01 and were not liable to duty.

Analysis: The earlier decision in the comparable matter of processed knitted fabrics was applied. It was held that no individual intermediate product of knitted or piled acrylic fabrics came into existence as a distinct commercial commodity known to the market. The material on record did not show that the goods were marketable or understood in trade as a separate saleable product. The fabric had already acquired the essential characteristics of blankets, and therefore the intermediate stage could not be treated as excisable goods merely because it could later be cut into blankets.

Conclusion: The goods were not established to be marketable excisable goods under Heading 60.01, and the Revenue's classification and duty demand failed.

Final Conclusion: The appeal was rejected, leaving the assessee's classification and non-liability to duty undisturbed.

Ratio Decidendi: An intermediate product is not exigible to duty unless it is shown to be marketable as a distinct commodity known to trade and possessing the character of goods.

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