Marketability and suppression in central excise determine duty liability, limitation, and site-based exemption eligibility.

Excise duty on websol was discussed as depending on proof of both manufacture and marketability, and the text notes that a mere movement of goods from preparation to use was treated as insufficient where commercial marketability was not found. It also states that the extended period of limitation requires deliberate suppression of material facts, which was not established where the department was already aware of the construction activity. On the exemption issue, the applicability of Notification No. 59/90-C.E. for goods manufactured at the construction site was said to require fresh factual examination. The matter was therefore remitted for reconsideration after hearing both sides.

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Issues: (i) Whether the websol was liable to central excise duty without a finding on marketability; (ii) whether the extended period of limitation could be invoked in the absence of suppression of facts; (iii) whether the benefit of Notification No. 59/90-C.E. was available to the goods manufactured at the site.

Issue (i): Whether the websol was liable to central excise duty without a finding on marketability.

Analysis: Liability to excise duty depends upon manufacture and marketability. The record showed no specific finding that the websol had a known commercial identity or was capable of sale in the market. A mere observation that the goods were moved from the place of preparation to the place of use was held insufficient to establish marketability. The assessee had specifically disputed marketability and contended that the goods were prepared for captive use in construction.

Conclusion: The demand of duty on websol could not be sustained for want of a finding on marketability.

Issue (ii): Whether the extended period of limitation could be invoked in the absence of suppression of facts.

Analysis: The extended period under the excise law requires suppression of material facts of a deliberate nature. The record indicated that the department was aware of the assessee's construction activity and had itself sought information earlier. In those circumstances, the omission to disclose could not be treated as suppression so as to justify the extended period.

Conclusion: Invocation of the extended period of limitation was not justified.

Issue (iii): Whether the benefit of Notification No. 59/90-C.E. was available to the goods manufactured at the site.

Analysis: The exemption notification covered specified goods manufactured at the site of construction for use at that site. The authority below had not examined the applicability of the notification in depth and had rejected the claim only on a broad view of the place of manufacture. The plea required proper consideration on the facts surrounding the project site and the manufacturing arrangement.

Conclusion: The claim for exemption required fresh adjudication and could not be finally rejected on the existing record.

Final Conclusion: The impugned order was set aside and the matter was remitted for fresh decision in accordance with law after granting both sides an opportunity of hearing.

Ratio Decidendi: Excise duty can be sustained only when manufacture and marketability are established, and the extended limitation period cannot be invoked absent deliberate suppression of material facts known to the department.

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