TaxTMI 
TaxTMI 
2010 (4) TMI 58
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....lished that the goods in question is marketable or capable of being marketed as a distinct product and that the Revenue has failed to discharge the burden to prove the marketability and dutiability of the intermediate product in the manufacture of rubber/canvas foot wear. The Member(Technical), however, disagreed with that finding and held that the Revenue has discharged its burden and took the view that the goods in question attracts duty. 3. In view of the difference of opinions expressed by the two members, the matter was placed before a third member who concurred with the view expressed by the Member (Technical) and a final order was passed on the above issue by the Tribunal on 24.12.2001 holding that double textured rubberized fabric / unvulcanised sandwiched fabric is an excisable product liable to central excise duty. No opinion was expressed by any of the members on the question of exemption, applicability of notification and the quantum of penalty imposed and those issues were left to be considered when the appeal is finally posted for hearing. 4. Aggrieved by the findings of the Tribunal dated 24.12.2001 the assessee has come up before us with this appeal. 5. The....
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....facture of shoe-uppers used in 2,51,29,646 numbers of exempted canvas shoes without payment of duty amounting to Rs. 88,80,782/- during the period from 01.04.1990 to 31.08.1994 without the cover of excise gate pass, without filing classification list, price list without accounting for production and clearance in the statutory central excise records and without observing other formalities prescribed under the Central Excise Rules, 1944. The assessee was directed to show cause why the above amount be not recovered from them under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11(A) of the Act and also to show cause why penal action be not taken against them under Rule 173 Q(1) of the Central Excise Rule, 1944. Yet another show cause notice dated 30.03.1995 also was issued to the assessee claiming duty amounting to Rs. 5,95,181 during the period from 01.09.1994 to 06.12.1994 stating that the assessee had failed to pay duty for the rubberized fabric manufactured and cleared for captive consumption for the above period as well and to show cause why penal action be not initiated under Rule 173Q(1) of Rules 1944. 8. The assessee filed detailed objections to the sho....
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.... of Central Excise, Bombay (1997) 2 SCC 677; Union of India vs. Sonic Electrochem (P) Ltd. (2002) 7 SCC 435; Cipla Ltd. vs. Commissioner of C.Ex., Bangalore 2008 (225) ELT 403 (SC).; Gujarat Nermada Valley Fert. Co. Ltd. vs. Collector of Ex.& Cus.(2005) 7 SCC 94. 11. Mr. V. Sekhar, learned senior counsel appearing for the Revenue, on the other hand, contended that the materials produced by the Revenue would be sufficient to hold that the product in question is a distinct product having commercial identity and is capable of being marketed. Learned counsel submitted that by the process undertaken by the assessee a new product emerges which is capable of being brought to market or being sold. Learned senior counsel also submitted that the material is also being sent out of the factory to the job workers for stitching purposes and is brought back from them, and, hence the said product is a commercially distinct product liable to be classified under the sub-heading 5905.10 of schedule to Central Excise Tariff Act. Reference was also made to the judgment of this court in UOI vs. Delhi Cloth & General Mills Co. 1997 (1) ELT J-199. Referring to the division bench judgment of the Calcutt....
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....s failed to lead. Other than supposition, there is no material on record that suggests that a small scale or medium scale manufacturer of brake linings and clutch facings "would be interested in buying" the said rings or that they are marketable at all. As to the brittleness of the said rings, it was for the Revenue to demonstrate that the appellants' averment in this behalf was incorrect and not for the Tribunal to assess their brittleness for itself. Articles in question in an appeal are shown to the Tribunal to enable the Tribunal to comprehend what it is that it is dealing with. It is not an invitation to the Tribunal to give its opinion thereon, brushing aside the evidence before it. The technical knowledge of members of the Tribunal makes for better appreciation of the record, but not its substitution." 14. In the above case this Tribunal was concerned with articles such as rings punched from asbestos boards and two types of asbestos fabrics, namely, special fabrics in coil of continuous length and M.R. grey in rolls. This Court noticed that the Revenue had not produced any evidence to establish that the said rings fell within Item 22F of Schedule to the Act and held i....
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....al product. 17. In Cipla Limited (supra) this Court was examining the question whether Benzyl Methyl Salycylate (BMS) is marketable and therefore liable to excise duty. After referring to various earlier decisions of this Court, it was held that marketability is an essential ingredient to hold that an article is dutiable or excisable to duty and it is well established principle of law that the burden is on the Revenue to prove that the goods are marketable or excisable and held that the product in question was neither marketed nor marketable and was only an intermediate product. It is useful to refer to the law laid down by this Court which reads as follows:- "Since marketability is an essential ingredient to hold that a product is dutiable or exigible, it was for the Revenue to prove that the product was marketable or was capable of being marketed. Manufacturing activity, by itself, does not prove the marketability. The product produced must be a distinct commodity known in the common parlance to the commercial community for the purpose of buying and selling. Since there is no evidence of either buying or selling in the present case, it cannot be held that the product ....