2016 (6) TMI 916

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....oti). During the course of manufacture of fruit drink the respondent also manufactured sugar syrup / solution which is captively consumed. The Revenue by entertaining a view that the said sugar solution / syrup is liable to excise duty under tariff heading 1702.30 as final product manufactured upon captive consumption of this product is exempted, initiated proceedings against the respondent which resulted in the order dated 07.11.2005. The Original Authority concluded that the sugar syrup manufactured and captively consumed is liable to central excise duty. A duty demand of Rs. 22,15,250/- was confirmed along with penalty of equivalent amount and penalty of Rs. 50,000/- on the manager of the respondent company. On appeal, the Commissioner (....

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.... course of manufacture of fruit based beverage can never be stored or ever marketed. The department has not even attempted to show any evidence or material in support of the contention that the said intermediary product is having a market and as such is marketable. The fact that many circulars have been issued by the Board and the matter was the subject matter of many of Tribunals as well as High Courts decisions itself will go to show that there was considerable uncertainty regarding tax liability of the impugned goods and as such it is the case of the respondent that there can be no question of fraud or suppression for invoking the extended period in demand. 5. We have heard both the sides and examined the appeal records. The point o....

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....ards circular dated 12.03.2004 to assert that if the sugar syrup is marketable as such then it is excisable without reference to percentage of sugar concentration. It is obvious that the application of circular will mainly depend upon the question of marketability of the impugned goods. Respondent have categorically asserted that the sugar syrup emerging during the course of manufacture of fruit based juices is never stored and is never capable of being marketed due to both lack of shelf life and lack of any market. 7. The excise duty liability of sugar syrup emerging as an intermediate product has been subject matter of many decisions by the Tribunal. Reference can be made to CCE Bangalore Vs. Smithkline Beecham Pharma (I) Ltd., 2014 (3....