Marketability test makes resin coated sand excisable, with duty on sale but not on captive consumption for mould manufacture.

Resin coated sand was treated as excisable goods because it had a distinct name, character and use and was known in the market as a commodity bought and sold as such, so the marketability test was satisfied and central excise duty applied on clearance for sale. The same product, when captively consumed in the manufacture of sand moulds, did not attract duty because there was no marketable clearance on that use.

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Issues: Whether resin coated sand is excisable goods liable to central excise duty, and whether duty is payable when it is cleared for sale or captively consumed in the manufacture of sand moulds.

Analysis: Resin coated sand was found to have a distinct name, character and use, and to be known in the market as a commodity bought and sold as such. On that footing, the criterion of marketability was satisfied, making it excisable and chargeable to duty under the charging provision. At the same time, the reasoning accepted that where the same resin coated sand was used captively for making sand moulds, no duty would arise on that captive use because such use did not involve a marketable clearance.

Conclusion: Resin coated sand is dutiable when cleared for sale in the market, but no duty is payable when it is captively consumed for manufacture of sand moulds.

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