TaxTMI 
TaxTMI 
2017 (8) TMI 1044
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.... of duty. The Pro-biotic Milk manufactured by the appellant is cleared in Plastic Bottles and they were discharging duty on the plastic bottles, on the basis of CAS-4 Standard. In respect of sugar syrup classifiable under Chapter heading 17029090, no duty was being discharged for its consumption captively even though there was no exemption on the said commodity for consuming captively in the factory. The exemption Notification No. 67/95-CE dated 16.03.1995, granting exemption to all inputs manufactured in a factory and consumed captively in the manufacture of final product, is subject to the proviso which stipulates that nothing contained in the notification shall apply to inputs used in or in relation to the manufacture of final products which are exempted from the whole of the excise duty or additional duty leviable thereon or, are chargeable to Nil rate of duty. In the instant case, the final product, i.e. Pro-biotic Milk attracts Nil rate of duty, therefore, it is not applicable to them. It was found that the appellant was having a separate dedicated tank for manufacturing sugar syrup. The sugar syrup was manufactured by dissolving Sugar Crystals in water in separate tank from ....
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....lar No.780/13/2004-CX dated 12.03.2004 The crux of all the above circulars issued by CBEC from time to time is that the sugar syrup is leviable to duty if it is marketable. He submits that the sugar syrup is covered by Food Safety and Standards Act, 2006, defines that a person who is engaged in the business of Food Products is responsible for ensuring the compliance of this Act, rules and regulations made thereunder. It is further clarified that the food safety means, assurance that the food is acceptable for human consumption according to its intended use. Section 26 of the said Act clarifies that every food operator shall ensure that the articles of food satisfy the requirements of this Act and the rules and regulations made thereunder at all stages of production, processing, import, distribution and sale within the business under his control. No food business operator shall himself or by any person on his behalf manufacture, store, sell or distribute any article of food in contravention of any other provision of this Act or of any Rule or regulation made thereunder. As per regulation 2.3.24 of the Food and Standards (Food Products Standards and Food Additives) Regulations, 2011....
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....ircular No.780/13/2004-CX dated 12.03.2004, which clarifies that if the Sugar Syrup is marketable as such without any reference to percentage of sugar concentration then the same is excisable when taken for captive consumption and removed as such. He also relied on the decision in the case of Cadbury India Limited Vs. Collector (supra) and submits that the impugned order is to be upheld. 5. After hearing both the sides, we find that in the facts and circumstances of the case whether the appellant is required to pay duty on sugar syrup manufactured as an intermediate product which has been used in manufacturing Pro-biotic Milk and consumed captively. It is admitted fact that as per the test reports, the total soluble solid content in the sugar syrup is 52.09%. Further, as per the Food Safety and Standards Act, 2006, Section 3 (n) defines as under:- "(n) "food business" means any under undertaking, whether for profit or not and whether public or private, carrying out any of the activities related to any stage of manufacture, processing, packaging, storage, transportation, distribution of food, import and includes food services, catering services, sale of food or food ingredients." ....
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....erence it was pointed out that sugar in water is not the same as sugar syrup mentioned in the Tariff and such sugar in water is not capable of being marketed. The sugar syrup which comes into existence in the course of manufacture of aerated water is not bought and sold as sugar syrup. As per the judgment in the case of M/s. Dunlop and M.R.F. vs. Collector of Central Excise, Madras (Order No. 26 and 27 of 1989, dated 12.01.1989) passed by CEGAT, New Delhi and the Supreme Court of India's decision, dated 31.01.1989 in the case of M/s. Bhor Industries Limited, Bombay Vs. Collector of Central Excise, Bombay, marketability decides the dutiability and marketability must be proved and that just because a product is mentioned in the tariff, it does not follow that it is dutiable. 5. The Conference concluded that a situation similar to the case of M/s. Bhor Industries Limited decided by the Supreme Court, exists in the case of sugar syrups which comes into existence in the case of manufacture of aerated waters and ayurvedic medicines. It was, noted that the sugar syrup was not marketable in the instant case as it has got very short shelf life and gets fermented if delayed and hence ca....
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....From the above discussion of various circulars, the test of marketability is to be achieved to demand duty on sugar solution/ sugar syrup in question. As per Food Safety and Standards Act, 2006, the sugar syrup having less than 63.5 per cent soluble solids cannot be marketed. In that circumstance, the sugar syrup manufactured by the appellant is not marketable. Moreover, the ld. adjudicating authority in the impugned order has relied on the sugar syrup manufactured by Rahul Sugar Products and Parle Biscuit Products to say that sugar syrup is marketable but has not given his finding that what are the contents of those sugar syrup, as it has been explained by CBEC in various circulars that sugar syrup having water, sugar and citric acid and other ingredients then it is having shelf life and it is marketable. But the adjudicating authority has not given any finding on that point. Moreover, reliance placed by the ld. Commissioner in the impugned order having not relied in the show cause notice and therefore, the reliance placed by the adjudicating authority to hold that the product is marketable is beyond the scope of show cause notice We also take note of the fact that the appellant h....
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....oduct is marketable. He also submits that appellant manufactures sugar solution and not sugar syrup. Sugar syrup is manufactured in confectionery industry and sugar solution is manufactured in medicaments industry. He also submits that in view of the fact there is no evidence of marketability and the product cannot be considered as sugar syrup, the appeal filed by the Revenue cannot be sustained. 5. We have considered the submissions made by both sides. As rightly submitted by the learned counsel for the respondent, just because the product can be kept for a week, it cannot be said that the same is marketable. There is no evidence of marketability produced by the Revenue either before the Commissioner or in the appeal memorandum. Further, we also find that the decision of the Hon'ble Supreme Court in the case of Moti Laminates Pvt. Ltd. (supra) is applicable to the facts of this case as regards marketability. Paragraph 11 of the decision of the Hon'ble S.C. is relevant and is reproduced as under : "11. It cannot thus be disputed that even if the resin produced by the appellants are resols as mentioned in item 15A it could not be subjected to duty. The purpose of specifyi....
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....se the chemical analysis of the sugar syrup reveals that concentration is only 29.15%. Even though the show cause notice alleges that the preservative have been added, the party contended that only the following items, which are not preservative, have been added to the sugar solutions emerging during the manufacturing process. Liquid Glucose Propyl Paraben Methyl Paraben Lactic Acid 20. There is no evidence to show that the above items are preservatives. In this case the sugar solution with specific parameters is produced for adding to crocin. The ultimate product is Crocin Syrup. In view of the requirements of the drug control, the sugar solution has to have strict norms. From the manufacturing process it is found that the sugar solution emerges in an integrated process in the manufacture of Crocin. Moreover to be marketable a product has to be in the proper container and packing. It is not the department's case that the sugar solution emerging in this process can be marketed and used for any other purpose. Since the sugar solution has to have strict quality norms, I cannot hold that the same can be marketed for other purposes. In other words, the sugar solution, ....