2010 (5) TMI 280

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....ble and, therefore, is not excisable mainly on two grounds - firstly, the product is exclusively meant for use thereof by one of the units of the appellants situated at Mysore, though the product as such is manufactured in their own unit at Bangalore, and secondly, that the Board Circular No. 495/61/99-CX. 3, dated 22-11-1999 clearly excludes the product in question from being marketable and excisable one. The claim of the appellants is sought to be seriously disputed on behalf of the appellants. 3. The Circular in question provides thus: "It has been brought to the notice of the Board that field formations are demanding duty on the compound preparation arising during the course of manufacture of Agarbathi classifying them under Headi....

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....fence raised by the appellants, in response to the show cause notice issued to the appellants, is that, the appellants have been manufacturing Agarbathi Perfumery compound by process of blending of various aromatic chemicals and perfumes numbering about 33 varieties and the product so developed is for exclusive use of the appellants' factory at Mysore. The composition of each variety is a trade secrete which determines the market share of the Agarbathi manufactured by the appellants in the local market. The Agarbathi Perfumery, so manufactured by the appellants, is not sold by them in the market, I but is used by them within their factory for further production. The perfumery compound blended by the appellants' factory at Bangalore was neve....

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....urther production of another product is concerned, the contention that the product is exclusively used for further product manufactured by the appellants is different from the contention that the product is incapable of being bought and sold in the market. A product which is exclusively used by the assessee can also be bought and sold in the market. Undoubtedly, it would depend upon the facts of each case. In the case in hand, prima facie, it appears that, it was a case of the appellants that since the product in question was exclusively used for further production of another product by the appellants in its own factory, that it should be considered as not being capable of being bought and sold in the market. It is difficult to accept this ....