Marketability test in excise law controls whether fabricated items are dutiable and exempted goods need factual examination.

Fabricated shapes and sections produced in a sheet metal division were examined on the distinct test of marketability, because manufacture alone does not establish excisability or removal from exemption under Notification No. 214/86. The article states that an item may come into existence through manufacture yet still fail to qualify as marketable unless it is capable of being bought and sold in the market. As the authorities had not properly determined that factual question, fresh evidence was permitted and the matter was remanded for a speaking order on marketability.

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Issues: Whether the fabricated shapes and sections manufactured in the sheet metal division were marketable goods so as to attract excise duty and affect availability of exemption under Notification No. 214/86.

Analysis: The question of marketability had not been examined with adequate attention by the authorities below. The fact that the fabricated items emerged from a manufacturing process did not by itself establish marketability. Manufacture and marketability are distinct concepts: an article may come into existence as manufactured goods, yet still fail the test of being capable of being taken to the market for sale. The matter therefore required a proper factual determination on whether each fabricated item was capable of being bought and sold in the market, and the parties were given liberty to adduce fresh evidence before the adjudicating authority.

Conclusion: The matter was remanded to the adjudicating authority for a speaking order on marketability, and the appeal was allowed with the impugned order set aside.

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