2000 (8) TMI 804 - AT - Central Excise

Classification of Culture Media for Excise Duty: Marketability Determination

The case involved the classification of culture media under Chapter Heading 38.21 for excise duty. The Commissioner classified the media as excisable, ... Media - Culture media - Muller and Miller media - Excisability - Marketability Issues:1. Classification of culture media under Chapter Heading 38.21 for excise duty.2. Determination of marketability of the culture media for excise duty liability.3. Consideration of time bar and valuation issues.Classification Issue:The case involved the classification of culture media manufactured by the appellants under Chapter Heading 38.21 of the Central Excise Tariff Act, 1985. The Commissioner's findings indicated that the culture media fell under this classification and was considered liable for excise duty. The appellants argued that the media did not have marketability and thus should not be classified as 'goods' subject to excise duty. The Commissioner's decision was based on the marketability of the product, which was deemed to be distinct from the ingredients used and capable of being sold in the market. However, the appellants disputed the establishment of marketability, highlighting differences in the media purchased and used for sterilization purposes. The Tribunal concluded that the issue required further examination and remanded the case for de novo adjudication to determine the marketability of the culture media.Marketability Issue:The crucial aspect of the case revolved around establishing the marketability of the culture media to determine its liability for excise duty. The learned DR emphasized the HSN notes for Chapter Heading 38.21 and argued that the Miller & Muller media, known as Pepton Digested Broth, satisfied the criteria for being excisable. The appellants' contention that the purchased media was solely used for sterilization was refuted by the DR, who stressed the importance of proving marketability beyond doubt. Citing a Supreme Court precedent, it was highlighted that marketability was a prerequisite for excise duty imposition, and mere specification in the tariff was insufficient without concrete evidence of commercial viability. The Tribunal acknowledged the need for technical and commercial evidence to establish marketability conclusively and directed a re-examination of this aspect.Time Bar and Valuation Issue:While the appellants raised concerns regarding time bar and valuation, the Tribunal refrained from addressing these issues due to the decision to remand the case for a fresh determination of marketability based on factual evidence. The matter was left open for further consideration before the lower authority, indicating that the focus of the decision was primarily on resolving the marketability question to ascertain the excise duty liability of the culture media. Ultimately, the appeal was allowed, and the case was remanded for de novo adjudication to clarify the marketability aspect comprehensively.