2009 (6) TMI 560

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....l. 2. The appellants are engaged in the manufacture of Glucose Biscuits, Elaichi Cream Biscuits and Orange Cream Biscuits. The issue involved in this case is as to whether the intermediate product viz. cream used in the Cream Biscuits would be classifiable under Heading No. 2106.90 of the Schedule to the Central Excise Tariff Act, 1985. The main contention of the appellant is that the cream is not marketable and, therefore, it is not excisable. The Commissioner confirmed the demand of duty for the period May, 2007 to February, 2008, cream consumed captively in the manufacture of biscuits and also imposed penalty of equal amount and a penalty was also imposed on the Director of the appellant company, appellant no. 2 3. Ld. Advocate on ....

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....eam for the purpose of filling in cream-biscuit, would not last after 24 hours. As regards marketability of cream made for captive use within factory, it is submitted that cream made of specific formula of ingredients suitable for use into cream-biscuits made by us, such cream could not be sold to others, as ingredient-mix, taste, flavour, etc. of each variety of cream differs and hence such ready to use-cream is neither saleable nor known to the market for the purpose of buying and selling it. It is a settled law that item/product not marketable, could not be subjected to excise duty." 6. It is revealed from the impugned order that the jurisdictional Asstt. Commissioner submitted his report to the office of the Commissioner, in which he....

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.... emerging from the treatment adopted in the assessee's factory, having 50% to 53% silver content, had a market. Mathematical ratio between total quantity of silver chloride and silver content cannot be establish marketability. The burden was on the department to prove such marketability. In the circumstances, on facts, we hold that the department has failed to prove the test of marketability." 8. In the case of Moti Laminates Pvt. Ltd. v. Collector of Central Excise reported in 1995 (76) E.L.T. 241 (S.C.), the Hon'ble Supreme Court had held as under :- "Since the test of marketability or capable of being marketable applies even to those goods which are mentioned in the tariff item the intermediate resin produced by the appellants whic....